The Bank of England gave homeowners further respite from higher mortgage costs yesterday by freezing interest rates for a seventh successive month.
The Bank's Monetary Policy Committee kept the base rate on hold at 4.75 per cent, the level at which it has remained since the Bank last raised rates by a quarter percentage point in August.
Economists had predicted a hold, although some had not ruled out an increase due to the risk of inflation exceeding Chancellor Gordon Brown's two per cent target in the next two years.
They said MPC members were likely to have delayed a further rate rise to wait for further evidence of consumer spending growth and wage inflation.
Business leaders welcomed the decision, saying companies and manufacturers in particular continued to face underlying risks.
The director general of the British Chambers of Commerce, David Frost, said there were no powerful arguments for an immediate change in rates.
"We strongly urge the MPC to persevere with a cautious stance," he said.
Manufacturers' organisation the EEF said it believed the overall economic picture remained mixed enough to allow the Bank continued breathing space, especially with the prospect of higher energy costs and a stronger currency.
Ian Smith, chief executive for EEF West Midlands, said: "The Bank is right to ignore premature calls for a rise in rates. Seven months without changes in rates have provided business with stability during a period of growing uncertainty."
Many analysts are forecasting a rise later this year, perhaps as early as May.
TUC chief economist Ian Brinkley said manufacturers would be relieved the Bank had not used above-expectations output figures earlier this week to justify a rise.
"Any increase in the coming months could choke off what appears to be a modest manufacturing recovery," he said.
CBI chief economist Ian McCafferty said businesses would be thankful that the MPC had "gone for stability rather than risk jumping the gun on a rate rise".
" Until the underlying strength of the economy is clearer, a rise in interest rates would be premature," he said.
The Institute of Directors said the decision meant rates may not change again until the summer after the General Election.
IoD chief economist Graeme Leach said: "However, one more quarter-point rise in the current economic cycle is still expected."
The Bank does not publish reasons for the MPC's decision until it releases the minutes of its meeting later this month.
Ross Walker at the Royal Bank of Scotland said the nine- member committee probably voted by 8-1 to hold rates.
But he said Paul Tucker - the only member of the MPC to vote for a rate rise last month - may have been joined by one, or possibly two, colleagues in voting for a rise.
RBOS continued to expect one further quarter-point rise in the base rate, but not before the next Inflation Report in May.