BoE cuts rates to 1.0%

The Bank of England cut interest rates by another 50 basis points today to a record low of 1.0 percent, aiming to help the British economy out of recession by getting consumers and companies to spend again.

British interest rates have now fallen for five months running and by a total of four percentage points as the 18-month-old global credit crunch has brought the economy to its knees.

House prices are falling sharply, big-name businesses are failing and hundreds of thousands of Britons have already lost their jobs. The International Monetary Fund has predicted the British economy will shrink 2.8 percent this year.

With rates approaching zero, the Bank of England is expected to resort to quantitative easing -- controlling the supply of money rather than just its cost -- to boost demand.

Central banks around the world are considering similar moves as the downturn is affecting most countries, prompting frequent comparisons with the Great Depression of the 1930s.

The U.S. Federal Reserve has already cut interest rates to a record low of between zero and 0.25 percent. In Japan, rates stand at just 0.1 percent. In the euro zone, they are at 2.0 percent and expected to fall to a new record low next month.