The Bank of England has again reduced interest rates, to counter what it called a "synchronised downturn".
The Bank’s monetary policy committee (MPC) has cut a further 0.5 per cent off the official Bank Rate bringing it to a new low of just one per cent.
In its assessment of the economy, the MPC noted output across advanced economies had fallen sharply and growth in emerging economies reduced markedly.
"Businesses have responded to the worsening outlook by running down inventories, cutting production, scaling back investment plans and shedding labour," the committee noted.
Government initiatives to help the banking system were welcomed by the board, which also predicted previous efforts to reduce rates and ease lending would soon take effect.
Staff in the offices in London of major lenders will be hoping this latest reduction will stimulate consumer and corporate borrowing.
Trevor Williams, chief economist at Lloyds TSB, said rates needed to be so low to counter economic conditions.
"But the economic woes that have paved the way to today’s base rate decision will not disappear overnight," he warned.