Canada’s annual inflation rate slowed in October as gasoline prices retreated from their record highs, Statistics Canada said today.

The government agency said that the annual inflation rate dipped to 2.6% in October amid tumbling gasoline prices, down from 3.4% in September.

Economists had been forecasting the inflation rate would ease to 2.9%.

On a month-over-month basis, consumer prices dropped by 0.5% from September as gas prices fell almost 9%. Lower hotel and women’s clothing costs also helped to keep a lid on the Consumer Price Index.

The core inflation rate, which excludes the eight most volatile items, remained at 1.7% for the third month in a row. The core rate has not been above the Bank of Canada’s 2% target in almost two years.

“Gasoline prices in recent months have apparently not yet had a major impact on other consumer prices,” StatsCan noted.