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Lower gas prices slow annual inflation rate to Bank of Canada's 2% bull's-eye

Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Canada’s price picture softened to two per cent last month following a sharp drop in gasoline prices compared to a year ago.

Statistics Canada’s annual inflation number for June hit the Bank of Canada’s ideal target as it came down from 2.4 per cent in May.

The result matched the expectations of economists, according to Thomson Reuters Eikon.

Consumers paid more last month compared with a year earlier for fresh vegetables, auto insurance and mortgage borrowing costs, while they saw lower price tags for gas, internet services and digital equipment.

Leaving out gas prices, Statistics Canada says last month’s annual inflation number was 2.6 per cent.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by omitting volatile items like gasoline, decelerated slightly to 2.03 per cent, down from 2.07 per cent the previous month.