The Bank of Canada (BoC) opted to hold its policy interest rate at 5% on Wednesday, bringing a pause to the rate hikes re-upped earlier this summer.

The pause comes amid increasing affordability struggles – ones that pushed the premiers of Ontario and British Columbia, Canada's two priciest provinces for real estate — to write letters to BoC Governor Tiff Macklem urging him to not raise rates any further as Canadians are already struggling to get by.

"With recent evidence that excess demand in the economy is easing, and given the lagged effects of monetary policy, Governing Council decided to hold the policy interest rate at 5% and continue to normalize the Bank’s balance sheet," the BoC announcement reads. "However, Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed."

Inflation saw a small bump in July, hitting 3.3%, which was up from June's 2.8%. Mortgages, however, were the largest contributor to inflation, with the mortgage cost index up 30.6% annually in July. This followed a 30.1% jump in June and marked the fifth consecutive month to register the largest increase on record.

"Inflation in advanced economies has continued to come down, but with measures of core inflation still elevated, major central banks remain focused on restoring price stability," the BoC said.

In the coming weeks and months, the Governing Council will be keeping an eye on excess demand, inflation expectations, wage growth, and corporate pricing behaviour to make sure they are in line with achieving the bank's 2% inflation target.

The next rate announcement is scheduled for October 26.