This will come as a relief to many retailers, still reeling from a glut of administrations already announced this year.
It has also been shaken by the news yesterday that Icelandic investor Baugur has filed for bankruptcy, raising a question mark over the ownership of many UK high street names including House of Fraser, Debenhams and Hamleys.
With the country now officially in recession the bank is trying to try and reignite consumer confidence and the economy as a whole.
The British Retail Consortium has said it supports the bank’s decision to make further cuts.
British Retail Consortium business director Jane Milne said: “Interest rate cuts are not the only tool to fix the recession. The key issue now is not the cost of credit – but its availability.”
She added: “The Bank of England faces a fine balancing act between further weakening sterling and attempting to revive the economy. What we need now is better access to credit and a boost to consumer confidence.”