"The sending of the letter by the Governor makes it odds on that a rate rise will occur next month, hitting business confidence at a time when the value of the pound is accelerating against the dollar.
"The three recent rate rises and the inevitability of a further rise next month is beginning to indicate that the unprecedented stability of recent years for business maybe coming to an end. Pegging inflation back down to 2 per cent is important to business but we need clarity from the MPC in how it is going approach this in forthcoming months.
"The BCC's Q1 2007 Quarterly Economic Survey of 4,700 businesses indicated the slowing in the pace of activity in both the manufacturing and service sectors. The events of today are likely to damage business confidence."