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The Bank of England has reduced interest rates to a record low of 1% from 1.5% in an attempt to boost the economy.
This is the fifth interest rate cut since October 2008, as the Bank seeks to encourage more lending.
However, there are concerns that savers will be hurt by lower interest rates.
Business groups argue that this rate reduction will not be enough to ease the economic crisis and will not encourage banks to lend.
The decision came after official data showed the UK has entered a recession in December, after two successive quarters of economic contraction.
The Bank Rate has now been reduced from 5% in October last year.
In a statement, the Bank of England said that the rate cuts, along with government measures to boost the economy, "would provide a considerable stimulus to activity as the year progresses."
Extract from the BBC.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
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