Key interest rates are being cut to new record lows in the battle to jolt European economies out of recession.

Jean-Claude Trichet, President of the European Central Bank ECB addresses the media during a news conference in Frankfurt, central Germany, 05 Mar 2009The Bank of England Thursday slashed its benchmark interest rate to 0.5 percent, a 314-year low, while the European Central Bank (ECB) lowered its key interest rate to 1.5 percent.

Both central banks hope cutting interest rates will help ease the credit crunch that has made it difficult for consumers and companies to get the loans they need to do business, something previous rate cuts have failed to accomplish.

As a result, the Bank of England says it will also start printing money and pumping it into the economy.

The process, known as "quantitative easing," is expected to put as much as $211 billion into circulation to stimulate economic growth.

The ECB also lowered its economic outlook for member nations, saying it now expects their combined economies to contract as much as 3.2 percent this year.

ECB President Jean-Claude Trichet has been reluctant to cut interest rates, but says the economic decline may make additional rate cuts necessary.

On Wednesday, India's central bank cut its benchmark interest rate for the fifth time in as many months as its economic growth slowed to a five-year low.

Unlike the U.S. and many European countries, India is not in recession. But Indian exports have been hurt by falling demand from other nations.

Some information for this report was provided by AFP and Reuters.