The pace of inflation in Canada cooled last month, offering some hope the central bank will resume lowering interest rates to help revive a sluggish economy being held down by trade uncertainty.

Canada’s inflation rate fell to 1.7 per cent in July, slowing slightly more than expected and easing some fears about sticky price growth. Statistics Canada’s consumer price index report on Tuesday said the deceleration was led by a decline in gasoline prices, which reflected the removal of the consumer carbon price.

Economists say they found some encouraging signs in the latest inflation numbers but some warn the Bank of Canada might need a bit more convincing to cut its key interest rate next month.