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The Bank of England on Thursday cut its benchmark interest rate half a percentage point to 1.5 percent, a historic low, while striving to prevent Britain from falling into a long and deep recession.

With the downturn on Thursday, British rates a cumulative decline of 3.5 percentage points since October last year, as part of attempts by the monetary authorities to revive an economy facing its first recession since 1992.


The rates have never fallen below 2 percent in the history of Britain, even during the Great Depression of the 1930s, which highlighted the magnitude of the current crisis.

After this cut, the British reduced the rates differential of Americans who are in a range of 0 to 0.25 percent.


Economists anticipate a further reduction by the Bank of England next month and believe that rates could fall below 1 percent, perhaps accompanied by signs that indicate that would remain low for a long period of time.

"We still are in a trend of lower rates, but have taken the foot throttle this month," said Alan Clarke, economist at BNP Paribas in the UK.


The pound, which has accumulated depreciation of 15 per cent against the euro since the Bank of England began its campaign of aggressive rate cuts in October, rose after the decision, as many in the markets expecting a sharp reduction after the reduction of one percentage point last month ready.

The central bank gave few signals on the next steps, but he said that while the fall in the pound and the recent tax cuts and boost activity rates this year, there were still risks of inflation falling below its target, unless rates drop from 2 percent.