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 by slightly more than expected in July to 1.7 per cent, which economists say could pave the way for the Bank of Canada to resume cutting interest rates.

Canada's annual inflation rate eased to 1.7% in July from 1.9% in the prior month as lower year-on-year gasoline prices kept the consumer price index low, data showed on Tuesday.