John Edmonds, of the GMB union, told BBC One's Breakfast with Frost most European countries were moving towards 3% rates while Britain's were still stuck at 7.25%.

"We need to get them down very quickly if we are going to avoid recession," he said.

Director General of the bosses' organisation the Confederation of British Industry, Adair Turner, backed Mr Edmonds' call for a 0.5% cut.

The call came as business people gathered in Birmingham for the CBI's annual conference.

"We think that would be reasonable for now," Mr Turner told BBC Radio News.

"We think it's sensible to go for 0.5% and then have another month to think about whether it needs to go further.

Adair Turner: Interest rates should be lower and more stable

"Probably it does - but the Bank is sensible to do one step and then think about it."

The Bank's Monetary Policy Committee will meet this week to decide whether to cut rates further, following its 0.25% reduction last month.

Britain's relatively high interest rates have been blamed for the strong pound that has made exports difficult.

It is claimed that they have triggered a spate of job losses in the manufacturing industry.