Business leaders in the West Midlands praised the Bank of England's Monetary Policy Committee for seeing sense and not raising interest rates.

Jerry Blackett, policy director at Birmingham Chamber of Commerce and Industry, speculated that perhaps the MPC was at last getting the message that increases in interest rates damaged the fragile manufacturing sector.

He said: "The standstill will ensure manufacturers have the opportunity to build on the slightly more encouraging January output figures from National Statistics.

"And the retail sector can breathe a sigh of relief that consumer spending, depressed as it is at the moment, is unlikely to be hit further, at least for the next month."

David Stevens, president of Solihull Chamber, said: "It would have been a little extraordinary if the MPC had increased rates a week before the Budget, and it is even more unlikely that they will go up next month - just a few weeks before the predicted General Election.

"But the MPC should be wary of killing off any competitive benefit manufacturing may be experiencing with static interest rates, by putting them up immediately after those two events.

"Business in all sectors must be given an even chance."

Louise Beard, chief executive of Coventry and Warwickshire Chamber of Commerce, said: "With luck, the recent relatively poor retail figures, along with dented consumer confidence, should be enough to keep the rate below five per cent for the foreseeable future."

Black Country Chamber believes a cut in rates is urgently required to boost business confidence.

Ian Brough, chief executive, said: "The Committee needs to act more aggressively to boost the UK economy and to match Chancellor Gordon Brown's prediction of improved economic performance for next year.

"The best environment for businesses to trade successfully is one where they have access to cheaper money.

"When interest rates are high, businesses are unable to commit the investment levels required to succeed in the global marketplace, where competition is more intense than ever."

Ronnie Bowker, managing partner at accountants Ernst & Young and board member of lobby group Birmingham Forward, agreed: "With high commodity prices still making their presence felt, small rate cuts may be necessary to support business growth over the coming months."

David Waller, chairman of accountants Pricewaterhouse-Coopers in the Midlands, said: "Thankfully the Monetary Policy Committee did not make any rash decisions this month and has maintained the status quo. It seems very unlikely that we will see a downwards movement in the base rate in the near future, but would hope that an increase is not on the cards in the next couple of months.

"Retail figures show that High Street spending has not picked up since it's significantly under par performance during the festive period, reflecting a less than confident mood among consumers. We must be very careful indeed not to damage consumer confidence further.

"The strong pound still presents a problem for exporters and confidence remains low. It is vital that Mervyn King and his team are mindful of the damage a move upwards could do to the fragile manufacturing sector and maintain a 'wait and see' approach."

Harvey Williams, national and regional spokesman for RICS West Midlands, said: "We would also urge Mr King and his team to consider the impact any increase will have on the region's ailing manufacturing base - particularly while the negotiations at Rover create such uncertainty for many employees within the automotive industry."