Economists warned that a surge in gasoline prices would deliver a sharp jolt to Canada’s inflation rate in March as global oil markets reacted to geopolitical tensions.

Data released by Statistics Canada showed the annual pace of inflation accelerated to 2.4 per cent in March, up from 1.8 per cent in February, as higher fuel costs and the increase in the industrial carbon tax pushed prices higher across the economy.

The increase was driven largely by a steep jump in gasoline prices, which climbed more than 20 per cent between February and March. The spike followed disruptions to global oil supply linked to conflict in the Middle East, including reduced shipments through key trade routes.

Economists had anticipated the rise, warning ahead of the data release that fuel costs would significantly influence the headline figure. Some forecasts had placed inflation closer to 2.5 or 2.6 per cent for the month.

Higher transportation costs due to fuel and carbon pricing increases and rising grocery prices also contributed to the increase, with food prices continuing to climb on an annual basis.

The Bank of Canada has signalled it is prepared to look past short-term volatility tied to energy prices, focusing instead on whether higher costs spread more broadly through the economy. The central bank is expected to weigh those risks in upcoming interest rate decisions.