The time has come for a debate about entering the euro as high interest rates and a strengthening pound continue to harm the region's businesses, the president of the Midlands World Trade Forum has claimed.

Peter Mathews said it would be "a disaster" if the Bank of England's Monetary Policy Committee increased interest rates again tomorrow.

"An interest rate rise this week would mean the pound gets stronger, which in turn will harm exports, make imports cheaper and threaten the region's manufacturing position," he cautioned.

"In defence of the MPC, they have only been increasing rates by a quarter point at a time, indicating they do realise the impact a larger increase would have on manufacturers and exporters as the pound strengthens, but even a quarter point has a big impact on the economy.

"The Bank always says its main task is to control inflation, but I would argue that interest rates are not the cleanest tool to use in achieving that. If anything, they can contribute to an increase as mortgages and loans go up."

Mr Mathews added: "Through the MWTF and my other business dealings I am in daily contact with exporters of all sizes and sectors and they are all beginning to say the same thing – we need to re-open the euro debate.

"For a start, it would instantly make us more competitive and become easier for our businesses to trade with Europe. There would be no more fluctuating pound and there would be no need for British firms to put a buffer on their prices to protect against changing currency rates when they tender for contracts.

"Joining the single currency would also mean lower interest rates and allow access to cheaper loans and mortgages from European banks.

"The debate has been stifled for some time and seems to have all but ceased but there is a growing feeling among businesses that the only way for the country to remain competitive on the international stage is for the UK to join the euro."

James Cooper, policy adviser at Birmingham Chamber of Commerce and Industry, urged the Bank to keep rates on hold.

He said: "Above all, businesses in Birmingham now need a stable economic climate. The three interest rate rises we have seen since last August have increased uncertainty.

"We hope that utility prices have now peaked and take note of the Bank of England expectations that year on year inflation will fall during 2007."

A wait and see stance was needed, with a view to lowering interest rates later in the year to make life easier for exporters, especially those in the manufacturing sector.

"Another hike now would run the risk of tipping our fragile industrial sectors back into decline."

David Stevens, president of Solihull Chamber of Commerce, said: "I hear more and more businesses saying what they would never have thought of saying two years ago – that the UK should go into the single currency.

"It is a sign that companies are getting frustrated in their development plans as interest rates rise."

Louise Bennett, chief executive of Coventry and Warwickshire Chamber of Commerce, said every rate rise was "an extra squeeze in what is already a thin trading time for many".