England's rate cut of 1.5 percentage points was the largest reduction since a 2-point drop in 1981, signaling growing jitters about the effects of a prolonged recession on the U.K. and world economies.

Shortly after the move in London, the European Central Bank slashed rates by one half of a percentage point, from 3.75 percent to 3.25 percent, for the 15 nations that use the euro as their currency.

The Swiss National Bank also cut its benchmark rate by one half of a percentage point, to 2 percent, and the Czech Republic's central bank cut its interest rate by three quarters of a percentage point, to 2.75 percent.

The moves came as governments across the continent confronted increasingly gloomy economic news in the midst of stagnant credit markets and an ongoing global financial crisis.