Canada's annual inflation rate slowed in December, data showed on Tuesday, helped by a sales tax break which kicked off from the mid of the month and brought down prices of alcohol, restaurant foods and children's clothing.

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.

Canada's inflation rate fell to 1.8 per cent in December, with the federal government's GST holiday contributing to a price decline across several categories, Statistics Canada said Tuesday.

Canada's annual inflation rate dropped to 1.8% in December, Statistics Canada said on Tuesday, slightly lower than expected and a tick below the prior month's 1.9%.

The annual inflation rate in Canada eased to 1.8% in December from 1.9% in the previous month, slightly below market expectations that it would remain at 1.9%. The annual core inflation rate in Canada which excludes eight of the most volatile components such as food,

Canada's annual inflation rate ticked lower in December, thanks in part to Ottawa's temporary GST tax break, but economists still see interest rate cuts on the horizon as potential tariffs loom.

Canada's annual inflation rate slowed to 1.8 per cent in December after rising 1.9 per cent in November, as the temporary GST tax break brought down the price of restaurant meals, alcohol and toys. Economists polled by Reuters had expected inflation to remain unchanged at 1.