The Bank of Canada raised its key interest rate Wednesday by 25 basis points to 4.5 per cent.

It is the eighth consecutive increase as the central bank tries to grapple with high inflation.

However, the Bank of Canada suggests hikes could be done for now if projections hold steady.

“If economic developments evolve broadly in line with the outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases,” the Bank of Canada said in a statement.

Inflation has declined from 8.1 per cent in June to 6.3 per cent in December, which the bank said reflects lower gasoline prices and, more recently, moderating prices for durable goods.

While short-term inflation expectations remain elevated, the Bank of Canada said three-month measures of core inflation have come down, suggesting that core inflation has peaked.

The central bank said inflation is expected to drop to around three per cent by the middle of the year and back to its two per cent target next year.

“Despite this progress, Canadians are still feeling the hardship of high inflation in their essential household expenses, with persistent price increases for food and shelter,” said the statement.