The Bank of Canada is leaving its trend-setting interest rate unchanged amid expectations the country’s economy is bouncing back from the technical recession that kicked off 2015.
The central bank says it’s holding its overnight rate at 0.5% because inflation and economic activity are unfolding largely as it predicted in its July update.
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The bank says strengthening non-resource sectors are supporting the rebound after the economy declined over the first two quarters of 2015 following a sharp slide in oil prices that began late last year.
It says the recovery is being led by robust household spending and is also receiving boosts from the lower Canadian dollar and the bank’s moves to lower its overnight rate in January and July.
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The bank expects real GDP to average about two per cent over the last two quarters of 2015, despite the struggles of the ever-important resource sector.