Canada’s inflation rate

accelerated to 1.9 per cent in August, but a slight easing in core inflation could cement the case for

Bank of Canada

interest rate cut on Wednesday.

Headline inflation rose from 1.7 per cent in July in part because gasoline prices fell more slowly in August, Statistics Canada said on Tuesday. Taking out energy and food, the

consumer price index

rose by 2.4 per cent in August, down from 2.5 per cent the month before.

Measures of core inflation, which the Bank of Canada prefers to look at when making its monetary policy decisions, remained sticky in August but decelerated slightly in two of three categories. CPI-median rose by 3.1 per cent year-over-year during the month, the same as in July; CPI-trim rose by three per cent in August, down from 3.1 per cent the month prior; and CPI-common rose by 2.5 per cent last month, down from 2.6 per cent in July.

The Bank of Canada has held its policy rate at its three previous decisions, citing evidence of underlying inflation as one of the reasons. Economists said barring any major surprises from Tuesday’s inflation data, they expect the central bank to deliver a quarter-point cut to its policy rate at its next decision on Wednesday.

Food inflation continued to outpace headline inflation, accelerating to 3.4 per cent in August, from 3.3 per cent in July. That increase was driven by a surge in the price of meat, which rose by 7.4 per cent last month, compared to an increase of 4.7 per cent in July. The price of fresh vegetables bucked the trend, falling by 1.1 per cent during the month, with consumers paying less for grapes, berries and other fresh fruit.

Growth in rent at 4.5 per cent and mortgage interest costs at 4.2 per cent were the main upward contributors to the year-over-year change in CPI for August. The price of passenger vehicles also rose by four per cent on a year-over-year basis.

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The main downward contributors to CPI in August were price declines in gasoline, travel tours and air transportation.

• Email: jgowling@postmedia.com