London - The Bank of England Wednesday cut interest rates by 0.5 percentage points to 4.5 per cent, it was announced Wednesday.

Prime Minister Gordon Brown told parliament that the decision to reduce the key interest rate had been taken as part of a worldwide action to combat economic turmoil.

The announcement came a day ahead of the end of the meeting of the Bank of England's Monetary Policy Committee (MPC) Thursday.

Interest rates have remained unchanged at 5 per cent for the past five months, as the Bank of England gave priority to the fight against inflation.

However, the turmoil on global financial markets and gloomy forecasts for the British economy combined to increase pressure on the bank to act. (dpa)