Business leaders in the West Midlands have welcomed the decision to hold interest rates at their historic low of 0.5 per cent – but believe it’s only a matter of time before they go up.

The debate among the nine-strong Monetary Policy Committee (MPC) was likely to have been heated as new pressures on inflation emerged in the Middle East and recent voting evidence showed an increase in the number of policymakers backing a hike.

Speculation is mounting that the Bank could bring in a rise as early as May, but West Midland business groups worry that this could be premature and damage the fragile recovery.

Mike Dell, president of Black Country Chamber of Commerce, said: "It is therefore imperative that the Monetary Policy Committee do not increase interest rates in the near future.

"We need to focus on rebalancing the economy and improving growth prospects in the medium-term and the Government needs to introduce more measures to help achieve this."

Local businesses are waiting with baited breath as most believe it is only a matter of time before rates increase.

Birmingham Chamber of Commerce Group president Christine Braddock said: "The stability that today’s decision will continue to bring is most welcome but rates will have to rise at some point this year to stave off increasing inflation.

"Rates have been at an historic low for precisely two years but fragility remains high as the British economy shrank in the past three months of 2010.

"GDP was also revised downwards as the economy contract by 0.6 per cent."

EEF Midlands region director Richard Halstead said there was little surprise at the Bank’s decision today.

"Last month’s inflation report pointed to a shift in the balance of risks around the Bank’s inflation forecasts over the next few years.

"However, the downward revision to GDP at the end of 2010 on the one hand and, on the other, continued rises in commodity prices will add to the MPC’s dilemma on when to move and how fast.

"Waiting for a clearer view of whether these factors are merely temporary still looks like the right move."