Canada’s inflation rate crept higher in August as rising meat and clothing prices drove the consumer price index (CPI) up 1.9 per cent year-over-year, compared to 1.7 per cent in July, according to Statistics Canada. The increase comes at a time when many households are already feeling the pinch of elevated living costs, with beef prices in particular making steak feel like a luxury item.
Despite the uptick, many economists believe the Bank of Canada will still move to cut its benchmark interest rate during its next announcement on September 17. Analysts argue that while inflation remains above the central bank’s comfort zone, overall economic momentum has slowed, creating pressure to ease borrowing costs and stimulate growth.
The CPI tracks the cost of a fixed basket of goods and services purchased by Canadians, making it a key measure of purchasing power and cost-of-living trends. For many consumers, the latest numbers reinforce that food affordability remains a pressing issue — even as broader inflation has moderated from the highs seen in 2023 and 2024.
Market watchers are now focused on the Bank of Canada’s decision, which could set the tone for interest rates heading into 2026 and shape household budgets, mortgage payments, and business investment in the months ahead.