The Financial Post reports in its Wednesday edition that Canadian inflation would have risen in January without Ottawa's tax holiday, complicating the Bank of Canada's next interest rate decision, according to some economists. The Post's Gigi Suhanic writes that in January, the consumer price index rose 1.9 per cent year over year, as reported by Statistics Canada. This matched expectations, but without the GST/HST holiday ending on Feb. 15, inflation might have hit 2.5 per cent. Rising inflation could end the BOC's rate-cutting cycle, which began due to increased inflation rates. Meanwhile, Canada's economy also faces challenges from U.S. tariffs. RBC economist Abbey Xu believes the BOC will "wait for more data for hints on how underlying price pressures are evolving excluding impact from the tax holiday, and take a pause from cutting interest rates in their next meeting in March." TD economist James Orlando says, "There are signs that price pressures could move higher in the months to come" now that the federal Liberals' tax holiday is over. Policy-makers will have to choose between responding to the threat tariffs pose or training their sights on inflation. Mr. Orlando says, "The BOC is in a difficult place."