(Adds details from report)
OTTAWA, Aug 21 (Reuters) - Canada's annual inflation rate
rose in July as higher prices for food and clothing offset the
moderating effect of cheaper energy, data from Statistics Canada
showed on Friday.
Annual inflation was 1.3 percent in July, up from 1 percent
in June and a tad shy of economists' expectations for 1.4
percent. It was the highest level since last December.
Core inflation, which strips out volatile items and is
closely watched by the Bank of Canada, was firmer, rising to 2.4
percent from 2.3 percent, as forecast.
The Bank of Canada has cut interest rates twice this year to
prop up the struggling economy and sees the effects of a weaker
currency and some sector-specific factors as temporarily
boosting the core rate.
On a year-over-year basis, prices were up in seven of the
eight major components of the main index, led by a 3.2 percent
increase in food as meat prices jumped 6.1 percent.
Clothing and footwear were up 1.3 percent.
While energy and gasoline prices continued to fall, the
declines were not as steep. The gasoline index tumbled 12.2
percent, moderating from the previous month's 14.1 percent drop.