A reduction in interest rates next month looks a safe bet after Bank of England Monetary Policy Committee minutes showed that pressure for a cut in June was defeated by only five votes to four.
The prospect of base rate easing back from 4.75 per cent after 11 months cheered business leaders in the West Midlands yesterday.
They have long argued that the Bank should balance its vigilance over the threat of inflation with the need to give struggling manufacturers a measure of relief.
Their argument was reinforced by the latest report on business conditions by the Bank's regional agents also published yesterday.
This showed that manufacturing output was continuing to weaken due to reduced spending by consumers worried about higher monthly mortgage repayments and falling house values.
Events showed that merely talking about a rate cut can be beneficial to manufacturers, especially those affected by the strength of the pound. The pound weakened 0.0061 against the dollar to 1.7301 and was down 0.0107 against the euro.
Peter Mathews, a Black Country-based international scrap metal dealer and president of the Midlands World Trade Forum, welcomed the downward drift of sterling.
"This news shows how delicate the world currency system is," he said.
"The fact that the vote was close had an immediate impact on the pound, which needs to weaken further if British businesses are to stay competitive. The longer rates are left on hold the longer the pound will remain overvalued, blunting our competitive edge and putting jobs at risk."
Minutes of the MPC meeting on July 6 and 7 showed that while a slim majority voted to peg rates, Kate Barker, Stephen Nickell, Charles Bean and new member David Walton wanted a cut.
Some economists had predicted that the gap would be as wide as 6-3.
The MPC "doves" argued that the consumer slowdown could become protracted thanks to high levels of household debt, according to the minutes. Others said it was unclear how "deep and persistent" the slowdown would prove to be.
"The Bank of England has sent a very definite signal that it intends to cut rates and it will probably ease by a quarter point at the August MPC meeting," said David Brown, chief economist at Bear Stearns.
Ian Brough, head of the Black Country Chamber of Commerce, was among those who interpreted the minutes as flagging up an August cut in rates. Instead of edging towards this almost inevitable cut and prolonging the agony of manufacturing the Bank should do it as soon as possible," he said.
"Industry needs a kickstart, not another kick in the teeth."
Jerry Blackett, policy director at Birmingham Chamber of Commerce and Industry, said MPC members were now at last "listening to those at the sharp end".
He went on: "The MPC must face up to the fact that the economy is in the doldrums - retail figures are down, manufacturing is desperately fighting to keep its head above water, and even the service sector is feeling the pinch.
"Already, future productivity figures are being adjusted down to take in the effects of the slow-up and so a cut in rates is a must if the slide is to be halted."
TUC Midland regional secretary Roger McKenzie said a cut in interest rates would ease fears of redundancy among workers in the region.