The Bank of Canada is widely expected to leave its key overnight rate on hold when it announces its decision on Wednesday, mainly because of a slowdown in economic growth but also due to recent data showing that inflation is easing.

After 10 hikes since March of last year, the central bank is probably done raising interest rates and will hold them at a 22-year high of 5.0% for at least six months, according to a Reuters poll of economists published on Friday.

Inflation peaked at over 8% last year, but it unexpectedly slowed to 3.8% in September, down from 4.0% in August.

"Canadian inflation decelerated in September, paving the way for the BoC to hold policy rates steady on Wednesday," Priscilla Thiagamoorthy, senior economist at BMO Capital Markets, said in a note.

Money markets had priced in a 43% chance for a hike on Wednesday before the September inflation data came in. By Tuesday, they had trimmed that to a 14% chance.

The policy announcement is due at 10 a.m. ET (1400 GMT).

The Bank of Canada (BoC) in July said inflation would stay above its 2% target until mid-2025 and growth would stall. Along with the rate decision, the BoC will also release updated economic forecasts.

Governor Tiff Macklem earlier this month said the economy was not heading for a "serious recession."

Derek Holt, head of capital markets economics at Scotiabank, said the BoC's 1.8% year-over-year growth forecast for the fourth quarter will likely have to be revised down to closer to 1%. Canada's economy stalled in July and edged up only slightly in August after shrinking in the second quarter.

Economists said the bank would likely leave the door open to future rate hikes because of wage pressures and stubborn core inflation.

"Canada's labor market remains strong, characterized by elevated wage pressures, so the BoC is unlikely to completely rule out the possibility of additional hikes," Matthew Ryan, head of Market Strategy at global financial services firm Ebury, said in a note. (Reporting by Steve Scherer; Editing by Mark Porter)