Canada’s annual inflation dropped one tenth of a percentage point to 2.4% in July, Statistics Canada said today.

Higher prices for gasoline, fresh fruit and other items were enough to cancel out the benefit the GST cut that took effect July 1, the government agency said.

Analysts had expected the inflation rate would drop to the 2% range as the tax cut worked its way through to consumers.

The core rate of inflation, which excludes the most volatile items, slipped to 1.5%, down from June’s 1.7% rate.

That was the lowest reading for the core rate in a year and was in line with economists’ estimates.

On a month-to month basis, consumer prices actually rose 0.1% in July. Gasoline was the main culprit, rising 4.6% over the month. Fresh fruit prices shot up 7.4%.

Higher prices for new housing also helped to drive the inflation rate, especially in Alberta, where prices have soared 40% in the past year.

Alberta once again led all provinces with the highest annual inflation rate, at 4.3%.

Ontario, British Columbia, and New Brunswick reported inflation rates of 2% in July, the lowest in the country.

The Canadian dollar opened at US89.41¢, down 0.06 of a cent.