This drop sees the base rate fall to 2 per cent, its lowest rate since 1951, which highlights the state of the ailing economy.
Last month the Bank cut rates by 1.5 per cent, which led to widespread demand for a reduction in mortgage rates.
Although mortgage borrowers will benefit from the cut, savers are set to be hit as their rates follow the drop.
Jones Lang LaSalle head of EMEA research Paul Guest says: “This interest rate cut was necessary despite the 150 reduction just a month ago. Investor and occupier confidence are crumbling and the wholesale money market continues to be very restricted.”
Marsh & Parsons estate agents managing director Peter Rollings says: “This is a kneejerk reaction from the authorities – it doesn’t matter how low interest rates go if banks continue to hoard their cash.
“I don’t want to seem ungrateful, but interest rates mean very little compared to the amount of money in the mortgage markets – this is the lynch pin for the property industry. Without movement in the housing market, the whole economy suffers.”