Business leaders from the region believe interest rates will remain at 0.5 per cent well into the New Year.

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said business was facing an uncertain start to 2011 and low interest rates would help them to handle that.

The Bank of England’s Monetary Policy Committee meets on Thursday to set rates and are predicted to keep them at 0.5 per cent.

Louise said: “The beginning of 2011 will see the VAT rise kick-in and the effects of the Comprehensive Spending Review will begin to be felt in earnest.

“Business likes to be able to plan with certainty but those two factors – plus many others – will mean firms in Coventry and Warwickshire are cautious going into the New Year.

“The low interest rate has certainly helped business to steer through the past 12 months and it will be needed once again as we begin 2011.”