The headline interest rate was cut by half a percentage point from 0.75% to 0.25% - the first unscheduled rate cut since the financial crisis, and the first on Budget day since the Bank of England was given the power to set rates independently of the Treasury.
It comes ahead of a Budget statement that is expected to see billions of pounds directed towards relief for companies facing potential collapse as demand drops and staff are forced to stay at home.
In a statement the bank said its role is to help UK businesses and households manage through an economic shock from coronavirus "that could prove sharp and large, but should be temporary".
It said the rate cut was part of a " comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19.
"These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm.”