Business leaders in Birmingham said they were unsurprised at the Bank of England Monetary Policy Committee's decision to leave interest rates unchanged at 4.5 per cent yesterday.
James Cooper, policy adviser at the city's Chamber of Commerce and Industry, said a reduction would have offered some relief.
But he cautioned: "The Bank has to be wary of inflationary pressures and there is still widespread concern over the current cost of energy.
"But, while business understands the dilemma facing the MPC, it is disappointed that the Bank was unable to take firmer action to counter downward economic pressures. Manufacturing remains under pressure and total industrial output has been falling.
"We strongly urge the MPC to take firm action soon to offer respite, particularly to manufacturers, whose fortunes are largely dependent on the cost of raw materials.
David Stevens, president of Solihull Chamber of Commerce, said: "Twelve months ago companies were saying that interest rates, because they were comparatively low, were not the main concern of business.
"All that has changed. The high cost of raw materials, consumer spend stagnation, competition from abroad and slowing orders mean that interest rates at their present scale are becoming an integral part of the mix facing business."
Peter Mathews, chairman of the Midland World Trade Forum, said: "The high price of steel is having a major effect on the industrial sector.
"That and other inflated raw material prices are forcing companies to pass the extra costs on to their customers - again allowing competition from abroad, especially the Far East, to have the upper hand.
"The MPC must at least try to stop the rot by lowering interest rates and giving companies the chance to compete."
Louise Bennett, chief executive of Coventry and Warwickshire Chamber of Commerce, said she expected the MPC to keep a steady hand throughout 2006.
She said: "I expected rates to stay the same in January as the markets settle after Christmas, but I would not be at all surprised if we see a quarter per cent cut in the coming months especially since trading conditions remain quite tough."
Trevor Williams, chief economist, Lloyds TSB Financial Markets, said: "This month many will be left wondering why, once again, the MPC has decided to keep the lid on rates, when for some the arguments for a decrease seem so overwhelming."
But, he cautioned, both the services sector and the housing market were picking up.
Roger Bootle, economic adviser to accountants Deloitte, said there was a "good chance" rates would be cut by 0.25 per cent in February. "And even if the Committee holds back for longer, I still see interest rates falling to four per cent by the end of the year," he predicted.
David Waller, Midlands chairman of accountants PricewaterhouseCoopers, said: "Manufacturers move into the New Year anticipating further job losses - already this week we have seen the demise of food manufacturer, Golden Wonder. Last year, we saw an increase in the number of both personal and business insolvencies.
"These are testing times for businesses in the region and we can only hope that the debate for a reduction in interest rates does not last too long. February would be an ideal month to make a change in our view."
Harvey Williams, RICS West Midlands spokesperson, said the MPC had "missed the perfect opportunity to kick 2006 off to a positive start with a reduction".
He added: "We can only hope the economy doesn't catch too much of a cold while Mervyn King and his team spend time fully digesting the post-Christmas scene."