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Canadian annual inflation unexpectedly slows amid lower gasoline prices

Annual consumer price inflation in Canada slowed in August as consumers paid less for gasoline amid decreased global oil prices, Statistics Canada stated.

Consumer prices rose 1.9% year over year in August, falling short of the estimate of economists polled by Econoday and July's annual growth rate of 2.0%.

Energy prices declined 4.7%, primarily due to a 10.2% annual fall in gasoline prices following a 6.9% decrease recorded in July. Increased production and weak international demand weighed on global oil prices, the statistics bureau said.

Meanwhile, natural gas prices rose 5.8% after posting a 3.2% annual increase in the prior month. This reflected a rebound in prices from summer, when inventories were higher and gas pipeline maintenance was ongoing, Statistics Canada noted.

Prices for food and shelter climbed 3.6% and 2.4%, respectively, in August. Services prices were up 2.6%.

Excluding food and energy, the consumer price index grew 2.2% year over year.

Month over month, consumer prices were down 0.1%, compared with a 0.5% increase recorded in July.

In its latest monetary policy decision, the Bank of Canada flagged weaker growth in the second half of 2019 amid rising global trade tensions, and said it would pay particular attention to global developments and their effect on the outlook for Canadian growth and inflation.