Canadian PressMar 8, 2023 10:40 AM

Elevated borrowing costs are expected to slow the economy down this year as people and businesses pull back on spending.

The Bank of Canada is holding its key interest rate at 4.5 per cent while reiterating it is taking a watch-and-decide approach with monetary policy.
At its last announcement on Jan. 25, the Bank of Canada announced a quarter percentage point rate hike, bringing its key rate to 4.5 per cent.
At the time, the central bank said it plans to take a pause from raising interest rates to assess the effects of previous hikes on the economy.
Elevated borrowing costs are expected to slow the economy down this year as people and businesses pull back on spending.
Recent economic data shows both the economy and inflation slowing, though the labour market was still running hot in January.
However, if inflation proves to be stickier than expected, the Bank of Canada has said it is ready to jump back in and raise rates further.