The Bank of England has cut interest rates from 3% to 2%, the lowest rate in over 50 years.
Since the Bank of England was founded in 1694, the Bank Rate has never fallen below 2%.
Economists were predicting that the rate could go below 2% in the coming months.
Sue Robinson, director of the Retail Motor Industry Federation (RMIF), said: "The Bank of England's decision to further reduce the interest rate is positive news for consumers and business, but it is vital that the saving is passed on to restore confidence in the marketplace.
"Consumers and business will feel more confident in the economy once they feel the effect of a lower cost of borrowing."