A leading Midlands business figure has warned that interest rates are unlikely to fall until the New Year - at the earliest.

Most experts are not expecting the Bank of England Monetary Policy Committee to cut rates further from the current 4.5 per cent when it announces its latest monthly decision today.

Indeed, Louise Bennett, chief executive of Coventry and Warwickshire Chamber of Commerce, feels there will be no move until after Christmas.

She said: "There were widespread predictions of a housing slump but that has not quite happened and recent figures have shown a rise in mortgage applications of almost 25 per cent - which hardly points to a crash.

"Prices have also started to rise, albeit slowly, but at the moment the headlines of a property meltdown have not been realised.

" Few had anticipated the slight lift in the property market and it has certainly cooled thoughts of a cut this month or December.

"Inflation could start to fall next year as oil prices start to settle and that could see the MPC move for a cut, but noone is that confident it will happen. We hope it will - the feedback we get from our members is that conditions are testing with competition stiffer than ever, and raw material prices still rising."

James Cooper, policy adviser at Birmingham Chamber of Commerce and Industry, said manufacturing was now technically in recession.

He went on: "Action is vital to turn round the underlying weakness in manufacturing.

"Manufacturers deserve support now. They have battled against unhelpful exchange rates and have been forced to become leaner to compete for global business.

"Delay will only make the situation worse in a sector which is on the brink of a serious recession."

Ronnie Bowker, board member of lobby group Birmingham Forward and senior partner at accountants Ernst & Young, said: "The weakening housing and manufacturing markets continue to impact business and consumer confidence is low.

"Business and consumer confidence is nowhere near being restored and this is a direct result of the continued softening within the housing, retail and manufacturing market.

" With Christmas just around the corner, we can expect high street sales to start early once again as consumers continue to feel the pinch.

"The MPC must keep rates at 4.5 per cent or consider another cut to stimulate the economy. This will ease the burden that many businesses and consumers are feeling and help towards a more promising Christmas and New Year."

Harvey Williams, Royal Institution of Chartered Surveyors' spokesman, said: " Once again, fears over inflationary pressure have jumped back to number one in the pecking order, while difficulties in specific sectors play the poor relation.

"Although there has been some good news coming out of the manufacturing sector and the housing market is more stable than earlier in the year, retailers are facing extreme pressure in the most important trading period of the year.

"We would urge Mervyn King and his team to keep a close eye on the High Street performance this Christmas. Poor sales figures have much wider implications than for the retail sector alone, providing a useful barometer of economic confidence across the board.

"It seems very unlikely that the MPC will take action this month with a cut in the base rate. The prospect of a reduction wasn't even on the agenda at the October meeting and is unlikely to be the focus of this month's discussion. The committee appear to be planning for winter hibernation, with little chance of a move downwards in interest rates before the New Year chimes in."

The meeting coincides with the Bank's Quarterly Inflation Report, which is due to be published next Wednesday. The MPC will scrutinise the report before making its decision, and it is widely thought that inflation rates will remain above two per cent for some time.