The emergency cut means the base rate is back down to its lowest level in history.

The Bank said: “The reduction in Bank Rate will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.”

It comes as the chancellor is expected to announce further measures to help individuals and businesses affected by the coronavirus in his Budget later today.

The unexpected rate cut follows a similar move by the US Federal Reserve last week.

It is the first unscheduled interest rate change from the BoE since the banking crisis 12 years ago.

The Bank has also announced a four-year loan scheme to support lending by banks to small and medium sized firms.

Six people in the UK have now died from the coronavirus and there have been 324 confirmed cases.

Laura Suter, personal finance analyst at investment platform AJ Bell, said the package of measures may help businesses but will be “light relief for individuals”.

“Mortgage rates are already near record lows and it’s unlikely providers will be able to cut them much more – let alone pass on the entire rate cut. The exception is those on tracker rates, who will see a near-immediate effect on their monthly repayments,” she said.

“What’s more, savers who have already seen a swathe of cuts to the interest they get on their cash are likely to be hit further.”