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Canada's interest rate fell below 3 per cent last month, but Canadians were still paying high grocery prices.
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The country's inflation rate has hit its lowest point since 2021. 

New data released by Statistics Canada shows that the rate hit 2.8 per cent in June, which is the first time it has dropped below 3 per cent since March 2021. 

In Alberta, the inflation rate dropped to 1.9 per cent according to Statistic Canada's Consumer Price Index (CPI), which tracks the price changes of various products and services. 

The driving force behind the drop, according to Stats Canada, is based on a wide variety of factors, but lower fuel prices helped things along, dropping 21.6 per cent year-over-year. 

Despite all this, Canadians consumers were still subject to high grocery prices, as June saw a 9.1 per cent year-over-year rise in June. 

Though, this new report does indicate that things are starting to settle down. 

This is in contrast to the Bank of Canada's interest rate, which has hit record highs of late, sitting at 5 per cent. The bank is expecting interest rates to stick around 3 per cent for the next year and are hoping things stabilize around 2 per cent by 2025. 

These hikes are meant to slow demand in the economy, making it much more expensive for people to take out loans. A downside of this, of course, is that it also drives up interest rates on mortgages.

For more information on the CPI, click here

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