After raising the key interest rate ten times over the past year and a half in an attempt to cool the overheating economy, the Bank of Canada has chosen this time to pause temporarily in its battle against inflation. Therefore, the central bank's key interest rate will remain at 5%, at least until October.

And after peaking at 8.1% in June 2022, inflation dropped to 3.3% in July, outside the range of 1% to 3% that the Bank of Canada has been trying to bring inflation down to for nearly two years.

The Consumer Price Index (CPI) briefly fell within this range in June (2.8%) before rising by 0.5 percentage points in July due to continued strong growth.

This pause by the central bank in combating inflation is eagerly awaited by Canadian families and businesses, which not only have to deal with widespread price increases but also have to absorb significant hikes in interest rates, especially on mortgage loans.

The cost of a closed five-year fixed-rate mortgage is about 6.8% interest, compared to 7% for the same loan at a reduced variable rate. This represents, in both cases, monthly payments of over $2,800 for a mortgage loan of about $400,000 amortized over 25 years.

In addition to this, rising rental prices, persistent inflation nearing 9% in grocery prices, and significant increases in vehicle prices.