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* Canadian inflation rate at lowest level since May
* Tame inflation means no pressure for interest rate hike
OTTAWA, Nov 22 (Reuters) - Lower gasoline prices pushed Canada's annual inflation rate in October down to a five-month low of 0.7 percent from 1.1 percent in September, Statistics Canada said on Friday.
The figure - less than the 0.9 percent forecast by market operators - underlines just how little pressure the Bank of Canada is under to raise interest rates. October's rate is the lowest since the 0.7 percent recorded in May.
The Bank of Canada, which targets 2 percent inflation, has kept its key overnight interest rate at a near-record low of 1 percent since September 2010. Last month, citing the below-par economy, the central bank removed its tightening bias and made clear that rates would not be going up any time soon.
The bank's closely watched annual core inflation rate, which strips out the prices of more volatile items such as energy and some foodstuffs, dipped to 1.2 percent in October from 1.3 percent in September.
Gasoline prices fell by 4.3 percent in the year to October after a 0.3 percent drop in the 12 months to September. Lower gasoline prices were recorded in all of Canada's 10 provinces.
Overall, five of the eight major components in the consumer price index recorded year-over-year gains. Shelter costs rose 1.3 percent from October 2012 while food prices climbed by 0.9 percent.