Bank base rate slashed to 3%

The Bank of England has slashed interest rates in by 1.5% to 3%, its lowest since 1955. This follows another 1.5% rate cut last month.

Ths is the first time the Bank has cut rates by more than half a percentage point since gaining its independence in 1997.

BBC economics editor Hugh Pym said:

"The Bank of England is using terms like 'very marked deterioration in the outlook' and 'severe contraction'.

"It is clearly very concerned about the possibility of a prolonged recession in the UK.