The Bank of England has cut interest rates to 0.5% - a fresh all-time low - and says it will now boost the money supply to help revive the economy.
Interest rates have now been reduced six times since October, and the latest cut from February's 1% was expected.
The Bank said it would expand the amount of money in the system by Â£75bn - a policy called quantitative easing - in an attempt to boost bank lending.
Bank Governor Mervyn King said the policy would "eventually work".
"Nothing in life is ever certain, but these measures we think will work in the long-term," he said.
"I don't know how long it will take, much depends on the situation in the rest of the world. But if countries work together, these measures will I believe eventually work."
He could do with sounding a tad more confident on this one!!