Bank of Canada says inflation to spike beyond 8% this week

Canadians can expect to dish more dollars as the Bank of Canada forecasts another spike in inflation.

Tiff Macklem, governor at Bank of Canada, spoke to the Canadian Federation of Independent Business (CFIB) on Thursday. A transcript of this meeting reveals the anxiety-inducing forecast.

“Inflation is high sevens,” said Macklem, referring to the 7.7% spike seen in year-over-year-inflation back in June. This increase broke a 39-year-record and it looks like we’re on our way to break another.

“It’s probably going to go a little over eight,” Macklem predicted. “We know oil prices were very high in June, so I wouldn’t be surprised to see it move up.”

The bank maintained, however, that high inflation is “not here to stay.”

ICYMI: Governor Macklem assures Canadians that high inflation is not here to stay. #cdnecon #economy https://t.co/bA9V8sfd0P pic.twitter.com/gMdDJgpC8V

— Bank of Canada (@bankofcanada) July 14, 2022

Macklem believes inflation will dip in the second half of the year “pretty gradually.”

“As we get into next year, we’ll start to see it come down a little faster,” sad the governor. “We think it will be about 3% by the end of next year and 2% in 2024.”

Macklem addressed CFIB just a day after the Bank of Canada announced a 100-point — or 1% — interest rate increase on Wednesday.

Before the final 1% rate hike came, analysts were expecting a 0.75% increase. But the Bank of Canada admitted that inflation in the country is “higher and more persistent” than it had anticipated back in April.

The next Consumer Price Index report will drop on Wednesday, July 20, and it will very likely end up confirmed Canadians’ worst fears about their expenses.