BoE Cuts Rates To Record Low

Britain enters recession for the first time since 1991 as official figures show output has contracted by 1.5 percent.

The Bank of England cut interest rates by another 50 basis points on Thursday to a record low of 0.5 percent, aiming to help the British economy out of recession.

Here is a timeline of the British economy since 2007.

Sept 2007 - Northern Rock, Britain's fifth-biggest mortgage lender, says the Bank of England has stepped in to provide support, triggering the first run on a major British bank in over a century following the U.S. subprime crisis.

Feb 2008 - Chancellor Alistair Darling announces the temporary nationalisation of the troubled Northern Rock after rejecting two bids - from Virgin and a rival 'in-house' offer led by the bank's management team - to take it over.

July 2008 - Bank of England policymaker David Blanchflower says in an interview that the British economy is heading into recession and interest rates should fall to well below their current 5 percent.

Sept. 2008 - Lloyds TSB agrees to rescue rival HBOS in a bid to scoop up Britain's biggest home loan lender to create a 28 billion pound ($40.89 billion) mortgage company.

Sept. 2008 - Bradford & Bingley, the country's ninth-biggest mortgage lender, is nationalised. The Treasury said it would take over B&B's 50 billion pound mortgage portfolio and sell its deposits and branches to Spanish bank Santander.

Oct. 2008 - The government bails out three major banks - Royal Bank of Scotland, Lloyds TSB, and HBOS with a 37 billion pound cash injection aimed at strengthening their capital reserves in the face of the credit crunch.

Nov. 2008 - The Bank of England makes a shock 1.5 percentage point cut in interest rates to just 3 percent, their lowest level in more than half a century and the biggest official interest rate cut since the 1981 slump.

-- Home sales hit the lowest in at least 30 years while house prices fall slightly less sharply, an industry survey shows.

-- Unemployment rises to 1.8 million in the three months to September, as the economy tips into recession. It is the highest level since December 1997.

-- BoE governor Mervyn King says the economy will shrink sharply in 2009 and inflation could fall below 1 percent in two years, amid signs the economy is heading for a painful recession.

-- Alistair Darling says he will cut sales tax and extend help for small businesses, low earners and households in a new stimulus package worth some 20 billion pounds.

-- The board of Woolworths places its retail business and entertainment wholesale distribution business into administration.

Jan. 2009 - The Bank of England cut interest rates by 50 basis points to a record low 1.5 percent. The rates are now at their lowest level since the central bank was founded more than 300 years ago.

-- Britain launches a second bank rescue plan, under which the BoE will set up an asset purchase programme to buy private sector assets with an initial fund of 50 billion pounds.

-- Britain's public finances deteriorate sharply as the recapitalisation of ailing RBS blows out the deficit to 44.2 billion pounds last month, its highest on record.

-- An industry body says that December car output is 47.5 percent lower than December the previous year -- the biggest monthly fall since August 1979.

-- The pound falls to a 7-1/2 year low against the dollar below $1.38 on Jan. 21 as worries about the banking sector and public finances continue to batter the currency. The euro also hits a two-week high against the pound at 93.97 pence.

-- Britain enters recession for the first time since 1991 as official figures show output has contracted by 1.5 percent in the final three months of 2008. The economy is shrinking at its fastest pace since 1980.

Feb. 2009 - The BoE cuts interest rates by another 50 basis to another record low of 1.0 percent. Interest rates have now fallen for five months running and by a total of four percentage points. -- The Royal Bank of Scotland reported on Feb. 26 reported a loss of 24.1 billion pounds ($34.3 billion) for 2008, the biggest in UK corporate history.

March 2009 - The BoE cuts interest rates by another 50 basis points to 0.5 percent, and says it will buy assets worth 75 billion pounds in a drive to help the British economy by expanding the money supply.