Business leaders in the West Midlands today called on the government to do more to ease the huge burden of unemployment in the region after GDP figures revealed the economy grew by 0.5 per cent in the first quarter of this year.

Welcoming today's figures, Birmingham Chamber of Commerce Group (BCCG) said the recovery was in danger of losing momentum.

President Christine Braddock said: "Our latest quarterly economic survey indicated that the economic environment was still choppy. The West Midlands still has 260,000 people who are unemployed, and we feel that the government should do more to enable business to create the jobs needed by these people. 

"This weak growth underlines the fact that the Bank of England's Monetary Policy Committee should hold off from increasing interest rates and they should stay at 0.5 per cent. Increasing interest rates now could damage the recovery and offer limited impact on inflation.

"Given the underlying uncertainties, the BCCG believes that the Monetary Policy Committee must avoid premature interest rate increases that may worsen risks of a serious setback."

Mike Ashton, spokesman for West Midlands Chambers of Commerce, said: "We must not underestimate the challenges ahead. Businesses are still facing real difficulties in managing cashflow and nearly a third of our members cite inflation as their biggest concern."