updated 2/5/2009 7:52:53 AM ET 2009-02-05T12:52:53

The Bank of England has cut its key interest rate by a further half percentage point to a new record low of 1 percent. The decision was widely expected as the central bank attempts to get the British economy back on the rails.

Separately, the European Central Bank left its key interest rate unchanged at 2 percent, pausing in a recent campaign of cuts that began in October.

The decision was widely expected as the central bank for the 16 countries that use the euro tries to keep the economy from faltering amid slowing growth and growing unemployment.

Figures recently confirmed that Britain is experiencing its worst recession since the early 1980s. The economy saw output plummet by a massive 1.5 percent in the fourth quarter of 2008.

Further interest rate reductions are anticipated from the Bank of England in the coming months. It has also hinted that it may start to expand the money supply once interest rates fall to, or near, zero percent.

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