Annual Canadian consumer inflation rose 2.5% in July, increasing at the slowest pace since March 2021, the country's statistical authority said Tuesday.
While the figure came in line with market expectations, it marked a slowdown from a 2.7% annual increase in June.
The figure, in addition, reflects a significant slowdown since the 8.1% annual gain recorded in June 2022 -- the highest for the consumer price index (CPI) in 39 years.
"Deceleration in headline inflation was broad-based, stemming from lower prices for travel tours, passenger vehicles and electricity," Statistics Canada said in a statement.
Prices for travel tours led the annual deceleration in July CPI with a 2.8% year-on-year decrease, followed by traveler accommodation falling 3.7% and air transportation declining 2.7%.
On a monthly basis, the CPI increased 0.4% in July, compared to the previous month, also coming in line with market estimates.
That figure, however, showed an acceleration from a 0.1% month-on-month decrease in June.
The monthly increase was driven by gasoline prices, which rose 2.4% in July month-on-month, according to the agency.
Statistics Canada said prices for shelter rose at a slower rate in July with 5.7%, compared with a June increase of 6.2%.
Annually, electricity prices fell 0.8% in July, following a 2.4% gain in June.
The mortgage interest cost index continued to slow year-on-year, up 21% in July, significantly down from a gain of 22.3% in June.
The rent index continued to increase annually, but at a slower pace of 8.5% in July, compared to 8.8% in June.
The Bank of Canada on July 24 reduced the policy rate by 25 basis points, its second rate cut in more than four years. The target for the overnight rate was lowered to 4.5%, with the bank rate at 4.75% and the deposit rate at 4.5%.
The central bank's previous rate cut came on June 5.
Its next monetary policy meeting will conclude on Sept. 4.
