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Canada's inflation rate continues its cooling trend in July, falling to 2.5 percent

Shoppers visit a small grocery store in Toronto, Ontario, Canada on May 11, 2024. Canadians are opting for smaller grocery stores as the boycott against Loblaws continues across the country. The boycott against Canadian grocery retailer Loblaw and its supermarkets began on May 1, 2024, and was organized by a Reddit community. It has since spread nationwide, with thousands of Canadians accusing Loblaw of greedy corporate practices such as greedflation and price gouging. This came after the corporation posted large profits while significantly increasing grocery prices. The Reddit community that initiated the boycott has grown to over 60,000 members since May 1. (Photo by Creative Touch Imaging Ltd./NurPhoto via Getty Images)

Economists expected Canada's annual inflation rate to ease to 2.5 percent. (Photo by Creative Touch Imaging Ltd./NurPhoto via Getty Images) (NurPhoto via Getty Images)

According to Statistics Canada, Canada's annual inflation rate slowed to 2.5 percent in July, from 2.7 percent in June. The increase in the consumer price index (CPI) marks the slowest increase since March 2021 and was in line with analysts' expectations.

On a monthly basis, the consumer price index rose by 0.4 percent in July. Seasonally adjusted, the consumer price index rose by 0.3 percent.

Statistics Canada said the decline in headline inflation was broad-based and helped by lower prices for travel, cars and electricity. Gasoline prices rose 2.4 percent month-on-month in July, offsetting some of the downward pressure on the federal agency's basket of goods and services.

Housing cost growth slowed from June on an annual basis, rising 5.7 percent from 6.2 percent in the previous month. The slowdown was helped by a decline in electricity prices, mortgage rates, rents, and heating oil and other fuel prices.

More to follow.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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