The Bank of England's decision to leave its official interest rate unchanged at 5.5 per cent was greeted with widespread resignation, coupled with confident predictions of a cut next month and the cost of borrowing falling perhaps as low as four per cent by next year.
The Bank gave no explanation for its decision, but a similar no-change decision by the European Central Bank was accompanied by a firm statement warning that the ECB is more inclined to raise its rate pre-emptively above the present four per cent, rather than cut it, at the first sign of pay deals chasing rising energy and food prices.
In Birmingham, Ronnie Bowker, Ernst & Young's senior partner, set the tone, insisting that while the Bank's first priority will always be to manage inflation, "it also has a responsibility for ensuring that economic growth is sustained".
He added: "It is already clear that the region's economy is starting to show signs of strain".
West Midland manufacturers have shown some resilience in difficult conditions, but if crude oil peaks at $150 a barrel, as one report suggested, they are going to find 2008 challenging, Mr Bowker warned.
"In what looks to be a turbulent 2008, the monetary policy committee has a difficult role in managing inflation and sustaining growth. However, the economy needs a boost and a rate cut would be the ideal remedy."
The British Retail Consortium's director general Kevin Hawkins said: "This decision makes the need for a cut next month all then more pressing. The worst Christmas sales growth for three years shows consumers and retailers are still feeling the effects of five previous rate rises as other bills continue to shoot up.
"While appreciating the decision was finely balanced, given the inflationary pressures facing the economy, 2008 is going to be tough for all customer-facing businesses. The longer the Bank delays cutting rates again, the greater the risk of the economy heading in the wrong direction."
At the British Chambers of Commerce, David Kern, economic adviser, said: "The decision is disappointing but not surprising. The MPC missed an important opportunity to underpin confidence and limit the damage to the economy.
"A modest interest rate cut would have alleviated the threats to the banking system and would have helped restore the smooth flow of credit in the economy. To minimise the threats, we strongly urge the MPC to cut interest rates in February."
EEF West Midlands highlighted the grow-ing risk of a US recession, the knock-on effects of the credit crunch on business and consumer confidence and a possible slump in the housing market. These outweighed any reason for keeping interest rates on hold, it argued.
Ian Smith, chief executive of EEF West Midlands, commented: "The Bank has missed an ideal opportunity to head off the pervading economic gloom which has enveloped the UK at the start of the year.
"The evidence from the past month points to a growing risk of a weaker economy and there is little reason to believe the case for a cut will be any weaker next month."
Edward Menashy, chief economist at the stockbroker Charles Stanley, was one of the few to support the Bank's decision outright.
"Inflation is like toothpaste, once it has escaped from the tube it is very difficult to put back in," he said. "Hence the MPC is treading carefully.
"With mounting pressure from rising wages, higher energy and food prices, and a rapid decline in the interbank market (three-month rate down to 5.64 per cent), the MPC was not in a position to take any risks with inflation."
Nevertheless, Mr Menashy reckons that by the end of 2008 markets could be anticipating further cuts down to 4.75 per cent.
Roger Bootle, economic adviser to Deloitte, described the Bank's decision as a pause for breath. "I would be very surprised if rates were not cut in February," he said.