Two buisness lobby groups have praised the decision to keep interest rates on hold at 0.5 per cent for a further month.

The Bank of England's Monetary Policy Committee  (MPC) voted to keep the base rate at its historic low for a 28th consecutive month, in a bid to push the country's economic situation up a gear.

Both the British Chambers of Commerce (BCC) and Confederation of British Industry have welcomed the halt, which comes despite the concern over the high level of inflation.

But according to David Kern, chief economist at the BCC, the MPC is right to keep the rate as it is in order to keep the recovery moving.

He said: " With UK inflation at 4.5 per cent, and set to increase further in the next few months, the MPC is naturally concerned.

"But tightening policy in reaction to higher utility prices and internationally generated inflation would be a major mistake."

He added: " As long as domestic wage pressures remain muted, the MPC should avoid any action that increases risks of an economic setback."

The economist said that if the economy weakens further, the committee should consider increasing the quantative easing programme above its current £200billion level.