Canada's inflation rate decreased to two per cent in August, Statistics Canada reported on Tuesday, finally hitting the Bank of Canada's target in its long campaign to cool price growth.

Inflation in Canada fell to the slowest yearly pace since February 2021 and core measures continued to ease, keeping the door open for larger interest rate cuts from the Bank of Canada.

Canadian inflation matched the central bank’s target last month for the first time in more than three years, smoothing the road for further cuts in interest rates.