The Bank of Canada expects the inflation rate to rise to "a little more" than 8%, once the data for June is released next week, and remain in this range for a few more months, according to Bank of Canada Governor Tiff Macklem in a speech to a business group in an online broadcast late Friday.

Macklem said, "We know that oil prices were very high in June, so I wouldn't be surprised to see them move upward."

Canadian inflation reached 7.7% in May, the highest level since January 1983. Analysts surveyed by Reuters expect June inflation to reach 8.3%, the highest level since 1982.

The data will be released on Wednesday at 8:30 AM Eastern Time. Macklem confirmed that the Bank of Canada now expects the average inflation rate to be around 8% for the next few months, then decline to about 3% by the end of 2023 and to the 2% target in 2024.

He also explained that the bank is very concerned about the wage-price spiral, where companies raise wages to keep workers, then pass the higher costs to households, which then want to increase wages to compensate for inflation.

He said, "You can see that this creates a self-reinforcing cycle," adding that the central bank will take the necessary action to bring inflation back to target.