Canada’s annual inflation rate was 2.3% in July, compared to 2.5% in June, on a slight easing in tight global supplies of oil for the second month in a row, Statistics Canada said today.

Economists had forecast, that inflation would be 2.5% year-on-year and 0.1% month-on-month.

Instead, month-on-month consumer prices fell 0.1%, mostly because gasoline prices were lower in July than in June, Statscan said.

Core inflation, which excludes the eight most volatile items like energy and food, was 1.9% in July compared to 1.7% in June. The increase in core inflation was in line with analyst expectations.

On a monthly basis, core inflation was 0.2% compared to 0.1% in June, Statscan said.

The Bank of Canada keeps a close watch on core inflation. The central bank is will issues its next decision on interest rates on September 8.

Energy prices fell 1.6% in July from June but were up 10.7% from July 2003.

Annual inflation in the services sector of Canada’s economy sped up to 2.4% in July from 2.3% in June. In the smaller goods-producing sector it slowed to 2.3% in July from 2.7% in June, StatsCan said.