Canada’s inflation rate slowed to 2% in August in line with the Bank of Canada’s target, Statistics Canada reported on Tuesday.
The Consumer Price Index (CPI) was down from a 2.5% gain in July and increased at its slowest pace since February 2021.
The decrease in headline inflation was attributed to lower gasoline prices, while mortgage interest costs and rent remained the main contributors to the increase.
Grocery prices were up 2.4% year-over-year in August, up from a 2.1% increase in July.
On a monthly basis, CPI fell 0.2% in August after increasing by 0.4% in July led by lower prices for air transportation, gasoline, clothing and footwear and travel tours.
The Bank of Canada began hiking rates in April 2022 to curb inflation to its 2% goal, making its first cut in July of this year.
With the key rate currently at 4.25%, analysts see the central bank ending its easing cycle next June with a rate of 2.25% as it seeks to balance cooling inflation and concerns about the strength of the labor market.