Birmingham Chamber of Commerce has welcomed the Bank of England's decision to put interest rates on hold, labelling it as a “brave” move.
Given the upward inflationary pressures, businesses feared that the Monetary Policy Committee would raise rates, the organisation said.
Katie Teasdale, senior policy adviser at the Chamber, said: “While inflation remains a major concern for the majority of businesses, it’s important to weigh up carefully the other threats facing the economy. There are sectors of the economy, such as property developers and retailers, that desperately need a boost and a rate increase would only have hindered them further.
“In that sense, today’s decision is a brave one by the Bank and indicates that they are listening to business and taking seriously there responsibilities to put a stop to the economic slowdown.
“BCI would urge the government to resist extra pay demands in the public sector. Business is concerned about the growing strike threat in the public sector, where a number of union leaders are seeking to re-negotiate recently agreed pay deals.
“The Government must resist these demands for extra pay. Public finances are very weak and neither business nor its employees can afford additional taxes.
“With increasing fuel and food prices, it is likely that there will have to be interest rate rises this year to control inflation. We must make sure that interest rates are allowed to take effect and keep inflation under control.”
But Peter Mathews, president of the Midlands World Trade Forum, claimed it was a “wrong move” by the bank not to cut interest rates.
He said: “A cut in interest rates would have made no difference to the economy, which is in the state it is because of global influences, especially soaring oil prices. The MPC have missed a trick. A cut in rates would have given business a much-needed confidence boost.”