Inflation in Canada fell to 2.8 percent in February as the costs of internet and mobile phone plans dropped, and grocery prices rose at a slower pace, the government statistical agency announced Tuesday.

The rate was 0.1 percentage points lower than in January, beating most forecasts.

Rents and mortgage interest costs, which have sparked public outcries that led to massive federal funding for new home construction, remained relatively high, according to Statistics Canada.

But grocery prices -- another thorny issue -- increased at a slower rate than core inflation for the first time since October 2021, the agency said in a statement.

Cellular services for those who signed up for new plans cost 26.5 percent less year-over-year in February -- following a 16.4 percent drop in January -- while internet access services fell 13.2 percent as providers offered special deals.

Offsetting the deceleration was a slight increase in gasoline prices.

Consumers also paid more for travel tours in February.

Desjardins analyst Royce Mendes said the unexpected cooling of prices "provides an opening for central bankers to begin discussing rate cuts."

He said in a research note that he now expects Bank of Canada governors to "sound more dovish" at their next meeting in April, "thereby setting up a rate cutting cycle beginning in June."

The central bank held its key lending rate at five percent earlier this month, citing concerns about the outlook for inflation.

It had aggressively raised rates over the past two years from a record low of 0.25 percent to the current level, set in July 2023 in a bid to tame soaring inflation.