West Midlands industry is being tested as never before, the Government and Bank of England were warned yesterday.
And they were told to be on red alert for further effects of the MG Rover collapse.
David Waller, chairman of PricewaterhouseCoopers in the Midlands, said: "While inflation reached an all-time high during March, this really wasn't the time to be considering a rise in the base rate.
"The latest retail figures showed a slight upturn, but this has been attributed to a peak in spending during Easter rather than a renewed confidence among shoppers.
"Most importantly, it is only four weeks since the collapse of MG Rover and the full impact on the wider economy is still not evident. Our latest insolvency figures show that company failures in the Midlands were up by seven per cent in the first quarter of 2005 - it is important that companies affected by the MG Rover situation are not put under too much pressure at this point or this could have a damaging impact on the health of businesses in the region.
"Business confidence has really been tested over the last few weeks in the West Midlands, particularly in the automotive sector. I would urge the Monetary Policy Committee to keep a close eye on how the MG Rover situation unfolds and adopt a cautious approach with interest rates in the coming months."
David Stephens, president of Solihull Chamber of Commerce, said: "Pressure to raise interest rates is coming from rising consumer price inflation. We know that the MPC is increasingly split on interest rates but the decision to maintain 4.75 per cent is a sensible compromise."
Steve Swinden, chairman of the Midlands World Trade Forum, added: "Exporters will welcome the stability especially under growing pressure from China, whose cheap imports are flooding into Europe."
And Black Country Chamber chief executive Ian Brough took the same line. "What we are looking for now is a period of relative calm so that businesses can take stock of the new political landscape and plan how they can deal with an increasingly tough commercial climate."
David Frost, director general of the British Chambers of Commerce, stated: "The MPC should reject forcefully calls for early increases."
Ronnie Bowker, managing partner at accountants Ernst & Young and board member of lobby group Birmingham Forward, said: "The decision to hold interest rates steady is a vital one at a time of both political and economic uncertainty.
"There is ambiguity surrounding Tony Blair's future which could prove unsettling over the coming months.
"The economic data is also contradictory, with the housing market remaining flat and consumer spending falling, while inflation has reached a seven-year high. While record debt and bankruptcy levels mean there is a clear pressure to reduce rates, rising inflation could be just as dangerous for businesses, especially those looking to export goods and services.
"Holding rates steady is the only logical option, providing a little certainty for the business community in what are certainly interesting times."
Harvey Williams, national and regional spokesman for the Royal Institution of Chartered Surveyors, said recent redundancies had put a "severe dent" in business confidence in the region.
He said: "During the last two months Monetary Policy Committee members Paul Tucker and Andrew Large have voted for an increase in the base rate. We would like to invite them to come and examine the economic fall-out caused by MG Rover, Marconi, Jaguar and Peugeot. Then perhaps they will realise the damaging impact that a rate rise could bring at this fragile time.
"At least the Governor, Mervyn King, has been on side in recent months - let's hope his support doesn't waiver at this critical time."
Valerie Bowles, economist and chief executive of Black Country law firm Manby & Steward, said: "With so many mixed messages coming from all sectors and around the globe it is not wise to risk frightening the UK market without more concrete evidence of inflation than they have at the moment.
"There will be more inflation data available this week which will give us a better indication of things to come. The MPC is already aware of what's in the inflation report, but will be unwilling to act purely on this information without preparing the ground more thoroughly."