The Bank of Canada has dropped interest rates another half percentage point, with the overnight rate now standing at 3.25 percent.

It follows a half point cut in October.

The central bank said the global economy is evolving largely as expected from projections released in October’s Monetary Policy Report.

In Canada, the economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and it says the fourth quarter also looks weaker than projected.

Third-quarter GDP growth was pulled down by business investment, inventories and exports.

However, the Bank says consumer spending and housing activity both picked up, suggesting lower interest rates are beginning to boost household spending.

A number of policy measures have been announced that will affect the outlook for near-term growth and inflation in Canada, including a temporary suspension of the GST/HST on many consumer products.

The break begins on Saturday and runs through February 15th.

The next scheduled date for announcing the overnight rate target is January 29th.