The Bank of England did the responsible thing by keeping interest rates on hold this month, the Birmingham Chamber of Commerce and Industry declared yesterday.
With inflation expected to top three per cent in the near future, having back-to-back cuts could have done more harm than good to the economy, it suggested.
BCI policy adviser Katie Teasdale said: "Inflation is still an important issue and the Bank of England is under great pressure to keep it at the Government's target of two per cent. Presently, CPI is 2.2 per cent and rising. Meanwhile, data released by the British Retail Consortium showed that annual shop price inflation is now at 1.3 per cent - the highest since the series began in December 2006 - driven by surging food and energy prices. This relatively high inflation combined with more positive signs of growth, particularly across the service sector, undermines the case for any further cuts just yet.
"Nevertheless, the Monetary Policy Committee still has a responsibility to the economy at large and we would be very disappointed if we didn't see another quarter point cut in the next few months. Businesses are coping well with trying conditions, but, without scare-mongering, this can't last for ever. We expect to see prompt and affirmative action from the MPC when this happens."
Peter Mathews, president of the Midlands World Trade Forum and also president of Black Country Chamber of Commerce, added: "Working in a global market we can see what is happening on the other side of the Atlantic and the cuts the US Federal Reserve is making. It would be easy for us to cast envious glances at the United States and see their low interest rates, but we know theirs have been cut because of a much more dramatic downturn in the economy than over here.
"Exporters continue to be resilient in the face of all the recent pressures put upon them, but we would still like to see another cut before the summer to give them some respite."
Sue Yates, president of Solihull Chamber, said: "The business community is understandably keen for interest rates to fall as soon as possible. The credit crunch is continuing to make life difficult for many of our firms as banks tighten their lending conditions effectively making it harder for businesses to raise funds and invest in future development."
Louise Bennett, chief executive of Coventry and Warwickshire Chamber, said she was disappointed but not surprised at the Bank of England's decision.
"We had hoped for a cut but recent intelligence hinted that the MPC may well hold.
"But while we would not want the Bank to be hasty, we also feel that a cut is in the interest of business and are hoping that the rate may well head down next month or in April."
Richard Brennan, chief executive of professional services lobbying group Birmingham Forward, said: "Given the on-going turbulence in the markets it is therefore not surprising the rate has remained the same this month. Birmingham Forward subscribes to the view that more bad news is to come and therefore, we hope that the Bank of England will reflect this with their decisions on the rate as the year progresses."
Richard Boot, chairman of the Institute of Directors in the West Midlands, said: "No surprise and wise.
"Back-to-back interest rate reductions would have been the wrong decision. With inflation clearly heading north there is far less certainty as to the extent to which output is heading south. In such circumstances the MPC is right to proceed with caution. The last thing the economy needs is for an overly aggressive easing in policy now, which has to be reversed later in the year."
David Waller, Midlands' chairman of PricewaterhouseCoopers, said: "The decision is disappointing for the region's business community.
"Many businesses are feeling the effects of the tighter lending conditions and the downturn in consumer confidence. The continuing slowdown in the housing market will do nothing to improve confidence in the short term.
"While it is important that we do not start talking ourselves into a recession, there is a danger that the Bank of England may fail to appreciate the impact that a more widespread downturn could have in regions like the Midlands. A further reduction in interest rates, sooner rather than later, is necessary to prevent this and it would be wrong to wait until the last minute to take this action."
Gurdip Chamba, regional chairman of the Royal Institution of Chartered Surveyors in the West Midlands, said: "The RICS believes that this was the appropriate decision following the lowering in rates in both December and February."
It expects another cut in May.