The Bank of Canada is set to announce its interest rate decision Wednesday morning.

Forecasters are widely expecting the central bank to hold its key interest rate steady as the economy weakens and inflation slows.

The key rate is currently sitting at five per cent, the highest it’s been since 2001.

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The Bank of Canada’s aggressive rate hikes since March 2022 are weighing on consumers and businesses, as the economy shrank in the second quarter and the labour market eased.

Meanwhile, Canada’s annual inflation rate fell to 3.8 per cent in September as price pressures weaken across the economy.

Most economists believe interest rates are already sufficiently high to restore price stability and return inflation to the Bank of Canada’s two per cent target.