Bank of Canada holds its key interest rate steady at 5% in final decision of 2023

The Bank of Canada continued to hold its key interest rate steady at 5% today, encouraged by evidence that higher rates are helping bring inflation down.

In a news release, the central bank says higher borrowing costs are clearly restraining spending as consumption and business investment remain relatively flat this year.

Today marks the third time in a row the central bank has opted to hold its key rate steady as forecasters widely expect the Bank of Canada's next move will be lowering rates.

However, the Bank of Canada is not ruling out future rate hikes, warning its governing council remains prepared to raise rates further, if needed.

Weighed down by higher borrowing costs, the Canadian economy has struggled to consistently grow this year.

Meanwhile, inflation has eased considerably over the last year, reaching 3.1% in October.