The Bank has also announced that an additional £50 billion will be injected into the economy bringing the total size of its asset purchase, or quantitative easing (QE), programme to £375 billion. The stimulus currently stands at £325 billion.
This is the latest wave of QE announced by the Government, aimed at reviving consumer spending and economic growth and it is believed that it will be used by November this year.
In March 2009, when base rate last moved, the Bank pumped £75 billion into the economy in an attempt to kick-start it. Later that year the stimulus increased to £200 billion. In October 2011 the Bank announced that another £50 billion would be injected, with the same amount added in February this year.
Previous to March 2009, the practice of QE had not been used in the UK .
A statement released by the Bank of England stated that: " UK output has barely grown for a year and a half and is estimated to have fallen in both of the past two quarters. The pace of expansion in most of the United Kingdom 's main export markets also appears to have slowed. Business indicators point to a continuation of that weakness in the near term, both at home and abroad."
Chris Williamson, chief economist at financial data provider Markit, said: "The labour market is also showing signs of losing momentum, having enjoyed a solid performance earlier in the year. The concern is, however, that more quantitative easing will have a diminished impact compared to previous bouts of money printing.
"Despite this worry, it seems likely that the MPC will vote for more quantitative easing at its July meeting, adding a further £50bn to the existing £325bn stimulus, if nothing else to provide a boost to business and consumer confidence and keep government borrowing costs down."
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