Canadian inflation would have accelerated further in January were it not for Ottawa’s tax holiday, putting the Bank of Canada in an awkward position when it comes to its next interest rate decision ,

A need to fuel faster growth and shield the economy from U.S. trade-policy uncertainty led senior Bank of Canada officials to agree on a quarter-point rate cut last month, according to minutes summarizing central bank deliberations.

Canada's annual inflation rate edged up to 1.9% in January, as higher energy prices offset the effect of the GST/HST "holiday" on food and certain other items, Statistics Canada said on Tuesday. Analysts had expected annual inflation rate to rise to 1.

Economists are more confident the Bank of Canada might pause its interest rate cuts next month — tariffs notwithstanding — as Canada's annual inflation rate ticked back up in January.