Ottawa, Dec 5 (IANS): The Bank of Canada, the Canadian central bank, has announced that it would keep its trendsetting interest rate locked at 1 percent, which turns out to be the 18th consecutive time for the benchmark rate to remain unchanged over two years.

It is also the longest period of no changes for the benchmark interest rate of the Canadian central bank since the early 1950s, reported Xinhua.

The Bank of Canada said in a statement Tuesday that country's economic activity in the third quarter was weak partly due to transitory disruptions in the energy sector, but insisted that the pace of economic growth is expected to pick up next year and be driven mainly by growth in consumption and business investments.

According to the statement, the housing activity of Canada is starting to decline from historically high levels, while the household debt burden continues to rise.

Though Canadian exports are expected to gradually increase, they will continue to be restrained by "weak foreign demand and ongoing competitiveness challenges", said the Canadian central bank.

"These challenges include the persistent strength of the Canadian dollar, which is being influenced by safe-haven flows and spillovers from global monetary policy."

In terms of the global economy, the Canadian central bank also observed that economic expansion in the US is progressing at a "gradual pace" and is being restrained by uncertainty related to the so-called fiscal cliff, which has created a standoff between Democratic President Barack Obama and the Republican-controlled House of Representatives over tackling the ballooning American deficit, which, for fiscal year 2012 that ended Sep 30, was estimated to be about $1.2 trillion.