Statistics Canada says the annual inflation rate in the country slowed to 7.0 percent in August, marking the second consecutive month of slowing inflation, largely due to falling gas prices. Statistics Canada is expected to release inflation figures for August this morning.

The country's inflation rate also slowed year-over-year in July to 7.6 percent, mainly due to falling gas prices. As its prices continue to decline, RBC expects the annual inflation rate in August to be 7.2 percent.

The federal government announced a set of measures last week to help low- and modest-income Canadians cope with the highest inflation in decades, including doubling the goods and services tax credit for six months.

Also, the Bank of Canada continues its fight against sharp inflation with rising interest rates, raising the key interest rate by three-quarters of a percentage point earlier this month.

The bank is scheduled to announce the next interest rate on October 26 and warned that further hikes are needed to lower inflation to its 2 percent target.