For the first time in more than a year, the Bank of Canada has decided not to raise their trend setting interest rate, choosing instead to keep it at 4.5 per cent.
The move comes as bank officials say we're seeing evidence of inflation slowing down.
"Global economic developments have evolved broadly in line with the outlook in the January Monetary Policy Report (MPR). Global growth continues to slow, and inflation, while still too high, is coming down due primarily to lower energy prices. In the United States and Europe, near-term outlooks for growth and inflation are both somewhat higher than expected in January. In particular, labour markets remain tight, and elevated core inflation is persisting," the central bank said in a statement issued Wednesday.
The bank had hiked the rate eight consecutive times before Wednesday's announcement - citing inflation as the reason behind the repeated increases.
"Inflation eased to 5.9 per cent in January, reflecting lower price increases for energy, durable goods and some services. Price increases for food and shelter remain high, causing continued hardship for Canadians. With weak economic growth for the next couple of quarters, pressures in product and labour markets are expected to ease. This should moderate wage growth and also increase competitive pressures, making it more difficult for businesses to pass on higher costs to consumers," the bank stated.
However, they did not rule out future rate hikes.
"Year-over-year measures of core inflation ticked down to about 5 per cent, and 3-month measures are around 3.5 per cent. Both will need to come down further, as will short-term inflation expectations, to return inflation to the 2 per cent target."
The next Bank of Canada policy announcement is expected on April 12.