A new report from RBC suggests interest rate hikes by the Bank of Canada may be working to tame consumer spending.

The latest data from RBC shows nominal spending and inflation-adjusted retail spending excluding auto sales declined in September, while discretionary spending plummeted.

“As the sun sets on the summer 2023 spending spree, Canadians have started to pare back,” the report said. “Consumer momentum has dissipated (as expected) as high rates hit home.”

Restaurant spending declined for the second consecutive month in September, while spending on essential items climbed 10 per cent year-over-year.

The numbers are the latest sign that the Bank of Canada’s measures to cool the economy may be taking hold, despite a recent bump in inflation numbers.

The Bank of Canada’s benchmark interest rate is currently set at five per cent. Its next rate decision is expected on Oct. 25, when economists largely anticipate another rate hold.