Economists had expected the rate to stand at 7.3% after inflation rose to a 40-year high of 8.1% earlier this summer. Instead, the rate fell even more than expected, largely because gasoline became much cheaper during the month. Natural gas prices fell 9.6% in August compared to the previous month. This is the biggest drop in gasoline prices in a month since April 2020, when the pandemic was just beginning. While gas got a little cheaper, food prices continued to rise — grocery costs rose 10.8 percent over the past year. This is the fastest increase in the typical grocery bill since 1981. “Food supply continued to be affected by multiple factors, including extreme weather events, higher input costs, Russia’s invasion of Ukraine and supply chain disruptions,” the data service said. House prices also fell for the first time since January 2021, as the impact of falling house prices more than offset higher mortgage rates. The fall in inflation will be a relief to the Bank of Canada, which has aggressively raised benchmark interest rates in an attempt to lower the number to a range it is more comfortable with, which is around 3%. Beneath the decline in headline numbers, there were more encouraging signs that core inflation may have begun to moderate. So-called core inflation – which strips out volatile items such as food and energy – fell to 5.2%, from 5.4% the previous month.
