In a widely expected move, the Bank of England lowered its policy rate to 1.5%, the lowest in the institution's 300-year history.

The half-point cut means the cost of borrowing has been lowered by 350 basis points since September last year when rates stood at 5%.

In a statement released with the decision, the Bank painted a gloomy picture of economic activity both within Britain and worldwide.

In Britain surveys of business suggested "the pace of contraction in activity increased during the