LONDON (Reuters) - The Bank of England cut interest rates by one percentage point to 2.0 percent on Thursday, taking borrowing costs to their lowest in more than half a century, amid signs the economy is heading for a deep recession.

Following are reactions from business groups and economists to the decision, latest comments first:

JAMES KNIGHTLEY, ING GLOBAL ECONOMICS

"The BoE's main concern is the lack of credit availability with 'conditions in money and credit markets remaining extremely difficult'. Moreover, the committee warned that it is unlikely that 'a normal volume of lending would be restored without further measures'.

"The upshot is that there will be intensifying pressure on the BoE to cut rates even further and there is the very real risk that Bank Rate will actually end up at zero next year. The Federal Reserve is openly talking about quantitative easing through outright purchases of Treasury securities and UK authorities may well have to consider such aggressive options if the credit crunch does not ease. With UK inflation posing no threat, all options can be considered."

RICHARD SNOOK, SENIOR ECONOMIST AT CEBR

"This takes interest rates to 2.0 per cent, the lowest since 1939, and equal to the lowest level in the Bank's three hundred year history.

"Historical comparisons are becoming increasingly extreme; highlighting the lack of precedent for what is a truly global and systemic crisis. We expect to see United Kingdom interest rates move to a record low in the first quarter of 2009, and Mervyn King's comments suggest that zero per cent could be reached as the Bank seeks to avoid depression and deflation.

"The Bank will soon have played all of its trump cards to boost the economy, so the key question is now; will this action be effective? Whilst no certain answer can be provided at this stage, it is useful to consider the key short term transmission mechanisms between interest rates to economic growth.