Business leaders in the West Midlands are deeply pessimistic about prospects for the economy, according to the Institute of Directors.

Regional chairman Richard Boot said the most likely out-turn was an L-shaped recovery with very weak quarter-on-quarter growth in 2010-11.

And the IoD warns there is a "significant risk of a double-dip or even a triple-tumble scenario".

The assessment comes as the Bank of England Monetary Policy Committee prepares for its first interest rate decision of the New Year on Thursday (January 7).

Mr Boot said: "We don't expect any move in interest rates or quantitative easing. The MPC will want to wait and see how the economy performed over the Christmas and New Year period before making any changes.

"We are very doubtful of a sharp bounce back in 2010. It would seem that de-leveraging and debt reduction are the priorities for consumers and companies and until this adjustment process fully unwinds we don't believe sustainable growth will occur. Yes, there could be an occasional spurt of activity, but the next two years look pretty glum."

The IOD says money supply growth remains weak, and points out that GDP is forecast to rise by just 0.5 per cent in 2010 and 1.5 per cent in 2011.

It adds that fiscal tightening following the imminent General Election will have an effect, particularly in 2011 - less negative if it comes via lower spending as opposed to higher taxation.

Mr Boot cautioned: "The recession has been 'abnormal' and we see every prospect of the recovery being 'abnormal' as well."