There was a widespread welcome in the West Midlands for the Bank of England's quarter-point interest rate cut, though some hoped for more.
Birmingham Chamber of Commerce and Industry policy adviser Katie Teasdale said the reduction to 5.25 per cent would boost confidence and act as a catalyst to economic growth.
"We understand why the Monetary Policy Committee did not go for a larger move as this would have come across as panic," she said. "Although there is a lot of doom and gloom, the truth is we are not yet in recession. In fact, we are some way away.
"Almost certainly, upward inflationary pressures inhibited the Bank from a larger cut, similar to what we have seen in the US. CPI inflation in December was at 2.1 per cent already above the Government's target and since then we have seen well-publicised increases in food and retail prices, as well as energy and fuel.
"This quarter-point cut was all that was needed to boost confidence among businesses but still combat inflation."
But Peter Mathews, president of the Midlands World Trade Forum and president of Black Country Chamber of Commerce, charged: "The Monetary Policy Committee simply don't under-stand what it is like out here at the sharp end of the economy. Business people wanted a clear sign from the Bank they were ready to respond to the pain we are feeling. What we have received instead is a pathetic token gesture."
Accountants Ernst & Young said the BoE decision would have come as a "huge relief" to the West Midlands business community, which had been showing signs of strain.
Christine Oates, head of tax in the Midlands, said: "The current economic uncertainty has severely dented consumer and corporate confidence, which is having a significant impact on the West Midlands' and wider UK economy.
"Looking at the housing market there has been a marked slowdown with the value of property dropping and the number of mortgage applications falling 40 per cent compared to last year. This downturn is adding to the slowdown on the high street.
"The latest figures from the Index of Production have revealed the region's manufacturers are starting to suffer. Businesses across the region have had the credit crunch firmly in their mind's eye and with many predicting it to take 18 months or more to work through the system it is clouding people's view of future economic performance.
"The big question for the future of the economy is where the growth is going to come from. Public spending has been cut back, there is a consumer slowdown, we have falling house prices and there has been a reduction in company investment.
"Whilst clearly I do not believe in the 'R' word, we have undoubtedly entered a challenging economic period. As such the MPC will need to be mindful further rate cuts over the coming year may be required."
Louise Bennett, chief executive of Coventry and Warwickshire Chamber of Commerce, said she wanted to see rates fall below five per cent before the year is out.
She said: "Just about everyone had predicted the quarter per cent drop but, even so, it has to be welcomed.
"There had been calls for a half per cent but that was never really likely.
"Instead, I believe the MPC will look at more of a steady drop in rates as opposed to the dramatic fall we have seen in America recently."
The MPC should have sent out a more positive message by cutting base rates by half a per cent, said Stephen Karle, chief executive of the West Bromwich Buiilding Society.
"It is vital to see a downward trend in the bank base rate for three main reasons: to assist homeowners in maintaining a tight grip on their family budgets; to help first-time buyers get onto the housing market; and to allow UK manufacturing to compete effectively in the global market," he said.
"I would urge the Bank to react to the situation, particularly in how it is being experienced in the regions, by bringing interest rates down again next month and giving everyone the opportunity to recover from the impact of last year's rate hikes."
Harvey Williams, RICS West Midlands spokesman, also called for further cuts "to offset a continuing tightening in the cost of credit, which is hitting household finances in the region".
He went on: "It is significant that December's interest rate cut has had little impact on consumers' wallets. Whilst a reduction of £15 a month on a typical £100,000 mortgage may offer some comfort, should the rate cut be passed on in full, rising costs elsewhere are likely to offset any benefit."
David Waller, Midlands' chairman of accountants PricewaterhouseCoopers, said: "Economic data is showing tightening consumer spending, lower activity levels in some sectors of manufacturing and a definite slowdown in the commercial property sector. There is clearly a need to address these issues before the situation deteriorates. A further cut is likely to prove necessary and this should not be left until the last moment."