The Bank of Canada was watching its words at its last interest rate announcement, in fear of spurring speculation that rate cuts are coming any time soon.

That’s according to the central bank’s summary of deliberations released Wednesday detailing what the governing council discussed in the lead-up to its last rate decision.

The Bank of Canada held its key interest rate steady at 5% earlier this month, amid signs of the economy weakening.

“(The governing council) also considered the possibility that their decision could be misinterpreted as a sign that policy tightening had ended and that lower interest rates would follow,” the summary said.

Given that council only considered two options – raising the key rate or holding it steady – the summary notes: “They agreed that they did not want to raise expectations of a near-term reduction in interest rates.”

To curb this risk, the Bank of Canada decided to emphasize that it will monitor incoming economic data and assess whether rates need to rise further.

Earlier this year, the central bank announced a pause on rate hikes to assess the effects of previous rate increases on the economy, a move that shifted the conversation in financial markets to when rate cuts may happen.

The summary reiterated the Bank of Canada is concerned that its underlying inflation is not moving down fast enough.

Core measures of inflation, which strip out volatility by removing items with frequent price swings, have not decreased by much recently.

In fact, the Bank of Canada’s preferred core measures of inflation accelerated last month, according to the latest consumer price index report released Tuesday.

The annual inflation rate has also ticked up for two consecutive months, coming in at 4.0 per cent in August.

Though the latest inflation reading shows price growth heading in the wrong direction, the central bank is also keeping an eye on other economic indicators.

The summary said the governing council is seeing clearer signs that the economy is weakening and consumer demand is slowing.

It considered being patient and waiting for more data to see whether rates are high enough to bring down inflation, and weighed that against the costs of moving too late.

“However, they recognized that policy might not yet be restrictive enough and that, by waiting to act, they ran the risk of having inflationary psychology become entrenched in Canada,” the summary said.

“This would mean they would need to tighten policy even further in the future.”