Six central banks, including the Bank of England, have cut interest rates by half a percentage point in an effort to steady the faltering global economy.

No decision on UK rates had been expected until Thursday - and the move puts the interest rate at 4.5% from 5%.

The US Federal Reserve has cut rates from 2% to 1.5% and the European Central Bank (ECB) trimmed its rate from 4.25% to 3.75%.

The unprecedented step failed to cheer world stock markets.

The central banks of Canada and Sweden and Switzerland all took similar action in the co-ordinated move.

China also cut its rate, but by 0.27 percentage points.

European and US initially reacted well to the news but later turned lower as investors were unconvinced that the rate cuts would really solve the financial crisis.

In New York, the main Dow Jones stock index ended down 189 points or 2% at 9,258.1 after weaving in and out of positive territory.

The last time the Bank of England cut rates in a special meeting was on 18 September 2001 - when rates came down from 5% to 4.75%.

In the UK, some mortgage lenders also immediately passed on the rate cut to borrowers - trimming their variable rates.

Source: BBC News