Business leaders in Birmingham yesterday warned that every effort must be made to avoid a double dip recession following the decision by the Bank of England to keep interest rates at an historic low of 0.5 per cent.

The bank of England's Monetary Policy Committee also resisted pumping more money into the economy through quantitative easing following higher-than-expected third quarter GDP growth of 0.8 per cent.

Katie Teasdale, Head of Policy at Birmingham Chamber of Commerce Group, said: "We welcome the stability but a further increase in quantitative easing must be under consideration. However, the Bank's decision is understandable following GDP growth and upbeat manufacturing data.

"The impact of the government's spending cuts to reduce the deficit will undoubtedly have a big impact on the private sector. So great care must be taken to ensure that the recovery is not damaged."