OTTAWA, Nov 19 Reuters Canada39;s annual inflation rate accelerated more than expected to 2.0 in October as gas prices fell less than the previous month, data showed on Tuesday, likely diluting chances of another large rate cut in December.

Analysts polled by Reuters had forecast that the inflation rate would speed up to 1.9 from 1.6 in September. In August, the annual rate was 2.

On a monthly basis, the consumer price index rose by 0.4 after two consecutive monthly declines, Statistics Canada data showed. The monthly gain also beat market expectations of a 0.3 increase.

While it was the first pick up in the annual inflation rate since May, the rise was broadly in line with central bank forecast for it rise back to its 2 after lower energy prices fueled a quicker than expected slowdown in headline inflation in recent months.

In October, Statistics Canada said a smaller 4 annual drop in gasoline prices compared with September39;s 10.7 decrease led to the acceleration. Excluding gasoline, the inflation rate remained at 2.2 for the third straight month.

This was last inflation data to be released ahead of the Bank of Canada39;s interest rate announcement on Dec. 11, when money markets see a roughly 60 chance of at least a 25 basis point cut.

The bank has lower its policy rate by 125 basis points over its last four policy setting meetings, including a 50 bp cut in October, when Governor Tiff Macklem said there would be further easing if the economy evolved roughly in…