Canada's annual inflation rate hit a 56-year low in July, when prices fell by 0.9 percent from a year earlier on sharply lower energy prices, Statistics Canada said on Wednesday. Analysts had on average expected an annual decline of 0.8 percent. July's figure - the lowest since the 1.4 percent drop recorded in July 1953 - is far weaker than the Bank of Canada's target range of around 2 percent annual inflation.
Statscan said the July figure reflected a 23.4 percent fall in energy prices from July 2008 to July 2009. The annual inflation rate excluding energy rose 1.8 percent in the 12 months to July 2009. The core annual inflation rate - closely watched by the Bank of Canada - dropped to 1.8 percent from 1.9 percent in June. The rate excludes the costs of volatile components such as fruit, vegetables, natural gas, fuel oil and gasoline. Inflation in July fell by 0.3 percent from June while the core rate remained unchanged over the same period.