Inflation hits 3.7 per cent, energy increases hit double digits as cost of Canadian life keeps climbing

CALGARY -

The cost of everyday life rose 3.7 per cent last month compared to last year, according to new data from Statistics Canada.

The biggest single increase was gasoline, rising 38.4 per cent over July of 2020.

It wasn't the only double digit increase Canadian consumers faced either.

"There's always a lot of moving parts to the electricity market," said Rob Roach, deputy chief economist with ATB Financial. "But there certainly has been a lot of demand over the summer, and that just naturally pushes up prices."

Electricity is up 21.1 per cent, with natural gas up 30.9 per cent. The hot summer has been at least a partial driver of the increase, Roach said.

Drought conditions have driven up crop prices and the impact of the hit dry summer are also being felt at the grocery store.

Groceries were up about two per cent. Restaurant meals were up 3.2 per cent.

The Bank of Canada tries to keep inflation at about two per cent. Their next update is scheduled for early September.

Economists are split on how much longer prices will continue to rise. One school of thought suggests prices will steady out around the new year, as the world hopefully returns to more normal patterns of living.

Other economists suggest large sums of cash savings will continue to drive prices higher for longer.