The Bank Of Canada Says The Inflation Rate Will Stay Sky-High Until Well Into 2022

If you were hoping for Canada's inflation rate to cool off any time soon, the Bank of Canada has bad news.

According to a press release issued today, the country's central bank said that it could be well into 2022 before the interest rate sinks back to a target of around 2%.

"The recent increase in CPI inflation was anticipated in July, but the main forces pushing up prices – higher energy prices and pandemic-related supply bottlenecks – now appear to be stronger and more persistent than expected," the Bank wrote in the statement.

"The Bank is closely watching inflation expectations and labour costs to ensure that the temporary forces pushing up prices do not become embedded in ongoing inflation," it added.

Speaking at a press conference, Bank of Canada governor Tiff Macklem said a combination of "supply disruptions and related cost pressures, as well as higher energy prices" are pushing costs up worldwide.

"We know higher prices are challenging for Canadians, making it harder for them to cover their bills," Macklem said. "I want to assure you that inflation is not going to stay as high as it is today, even if it is going to take somewhat longer to come down."

The inflation rate recently hit its highest rate in almost 20 years, and it's causing food and gas prices to go up with it, leading many Canadians to change the way they're shopping as a result.

This article's cover image was used for illustrative purposes only.