Inflation In Canada Is Finally Slowing Down But It's Not All Good News For Your Wallet

There's finally a little bit of good news ahead, folks! Inflation rates in Canada fell last month, and it's a nice step down from the recent high of 8.1%.

Released by Statistics Canada on August 16, July's Consumer Price Index (CPI) found that inflation in Canada actually started to decelerate.

The CPI found that July's inflation rate was up 7.6% from the same time last year. While still high, it does mark a potential downward trend in the coming months.

This slight cool down comes after recent near record-breaking inflation numbers, with June of this year marking the highest inflation rate since January 1983.

This decrease will be felt in several areas for the average Canadian.

One of the more noticeable decreases will likely be in the cost of gasoline, which is now only 35.6% more expensive than it was last year, as opposed to June's rate of 54.6%.

It's not all good news, though, as the price of groceries and food has gone up compared to June. Your grocery bill will now be 9.9% higher than it was last year, compared to June's rate of 9.4%.

These prices are a product of the continued conflict in Ukraine, which has made wheat more expensive and created higher demand through uncertainty in supply chains.

Specific items you can expect to be more expensive include nonalcoholic beverages, which are up by 9.5%, sugar and confectionery (up by 9.7%), eggs (up by 15.8%), and coffee and tea (up by 13.8%).

And if you were hoping to get away from it all, flights and hotels are all also on an upward trajectory. Airfare is up a massive 25.5% from just June alone, and the cost of accommodation has increased by 47.7% since last year — in fact, it's up 70% in Ontario alone.

Eating out also became pricier, with restaurant bills up 7.3% in July, as compared to June.

While eight provinces experienced an overall decrease in the inflation rate, the province experiencing the highest inflation rate is still P.E.I., with a July rate of 9.5%, compared to June's rate of 10.9%.

To curb rising inflation, the Bank of Canada has instituted one of the highest interest rates seen in the last 14 years.

The interest rates are now sitting at 2.5%, after being increased by 1% in July alone.

Per The Canadian Press, the next interest rate announcement is expected on September 7, and it is predicted that the rate will be increased yet again.

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