Canadianinflationslowed in July as consumers paid much less for gasoline, marking what could be the start of a long journey back to low and stable rates of price growth.

The Consumer Price Index rose 7.6 per cent in July from a year earlier, Statistics Canada said Tuesday. That was down from8.1 per cent in June, the highest inflation rate in nearly 40 years. On a monthly basis, the change in CPI was the smallest since December, 2021.

Gas prices, while still much higher than last year, fell 9.2 per cent in July from June, making the biggest contribution to lower headline inflation. August is bringing more relief at the pump, too: The national average price for regular unleaded gas was $1.73 a litre on Monday, down 9 per cent from the average retail price in July, according to data from Kalibrate Technologies.

Inflation slowed to 7.6% in July. Here's what that means for the cost of living in Canada

Still, other details in Tuesday's report were less encouraging. Groceries rose at an annual rate of 9.9 per cent in July, accelerating from 9.4 per cent in June. Rents increased 4.9 per cent, the most since 1989. And natural gas prices jumped by a whopping 43 per cent, which Statscan attributed in part to the Ontario Energy Board's approval of rate increases.

Moreover, the average of the Bank of Canada's core measures of annual inflation - which strip out volatile price changes - rose to 5.3 per cent from 5.2 per cent. Financial analysts said those details underscored why the central bank is certain to keep hiking interest rates.

"It's great that headline inflation is moving in the right direction as energy prices ease," said Leslie Preston, managing director at TD Economics. "But there was very little cooling in core inflation. And I think it's a reminder that the Bank of Canada needs to continue to raise rates to rein in inflationary pressures."

Similar to Canada, the U.S. reported an easing of inflation last week, with the annual rate falling to8.5 per cent in Julyfrom 9.1 per cent in June. In addition to gas, several key commodities - including wheat and lumber - have tumbled this summer, as have shipping rates, offering some modicum of relief to companies and households.

CANADA'S INFLATION RATE

Canada's inflation rate Annual percentage change in consumer price index 14% 12 10 -2 '1959 '1974 '1973 '1932 '1936 '1990 '1994 '1993 '2002 '2005 '2010 '2014 '2018 THE GLOBE AND MAIL, SOURCE: STATISTICS CANADA DATA SHARE