BUSINESSES in the region last night praised the Bank of England for once more freezing interest rates.

George Cowcher, chief executive of the North East Chamber of Commerce, said: "This is a sound decision by the Bank of England.

"For the tenth month in succession, it has offered up a stable platform for businesses that gives them one less thing to worry about.

"We are going through an uncertain economic period and manufacturing is having to be particularly resilient.

"While experts were predicting the next rates movement would be a rise, we are clearly seeing signs that the only right direction away from the current status quo would have to be a cut."

Evidence of a worsening picture for the retail and manufacturing sectors failed to dissuade the Bank's Monetary Policy Committee from keeping the cost of borrowing unchanged at 4.75 per cent.

The move was widely expected in the City, which heard warnings this week of a consumer-led recession from retail chiefs and a sales slump at high street stalwart Woolworths.

Banking firms including Royal Bank of Scotland and Barclays have seen credit card arrears rise on a year earlier, but insisted the levels were not cause for alarm.

The CBI said the no-change decision should shore up business confidence.

CBI chief economic advisor Ian McCafferty said: "We must avoid talking ourselves down, as the outlook is still for continued - if somewhat more modest - growth."

But the rates freeze disappointed the British Retail Consortium.