This morning, Statistics Canada (StatCan) published its anticipated March inflation report. The Consumer Price Index (CPI) rose 2.9% on a year-over-year basis in March, up from a 2.8% gain in February.

Economists had predicted that the Consumer Price Index (CPI) would tick up in March thanks, in part, to an increase in gasoline prices. Gasoline prices indeed contributed the most to the acceleration, as prices at the pump rose faster in March compared with February. Excluding gasoline, the all-items CPI slowed to a 2.8% year-over-year increase, down from a 2.9% gain in February.

Last month, the annual pace of inflation cooled to 2.8% in February compared with 2.9% in January. For March, it was expected by analysts that this figure would hit 3.1%.

Shelter prices continued to apply upward pressure in March, with the mortgage interest cost and rent indexes contributing the most to the year-over-year gain in the all-items CPI, according to StatCan. Prices for services (+4.5%) continued to rise in March compared with February (+4.2%), driven by air transportation and rent, outpacing price growth for goods (+1.1%) which slowed compared with February (+1.2%) on a yearly basis.

On a monthly basis, the CPI rose 0.6% in March. Month-over-month price growth was broad-based. All eyes of those looking to enter the housing market were likely on the report, as it and its April figures will be highly influential in whether the central bank opts to lower its policy rate. The big question is whether the slight spike is enough for Canada’s central bank to change its direction on the interest rate front. Last week, the Bank of Canada held its key interest rate at 5%, but hinted that an interest rate cut could be on the horizon for June.

“Yes, it’s within the realm of possibilities,” Macklem said at a press conference on Wednesday, when asked by a reporter about the likelihood that the Bank will lower its policy rate at its next meeting, slated for June 5. “I think we’ve been pretty clear, we are encouraged by what we’ve seen since January. If you look at our indicators, they’re not all progressing at the same speed, but they’ve all been moving in the right direction: inflation has come down, core inflation has come down, the more timely three month measures of core inflation suggests there’s downward momentum.”

The report comes in advance of the release of the federal government’s budget later this afternoon. Front and centre in the budget is Canada’s housing crisis, with Trudeau’s government fresh from a slew of housing announcements last week that involved everything from 30-year mortgages for some first-time homebuyers, to a promise to fix the growing encampment problem.