The Bank of England's Monetary Policy Committee has voted to leave interest rates on hold at 4% for another month.
The Confederation of British Industry said the bank made the right decision in light of worldwide economic uncertainty.
Ian McCafferty, CBI chief economist, says: “In the face of so much uncertainty at home and abroad, the bank was right to leave rates unchanged for now.”
But he says the bank must be ready to make another rate cut if necessary.
“The world economic outlook remains difficult. In the UK there is already some evidence that the economy may be taking a turn for the worse and we have yet to see the impact of National Insurance increases on consumer spending and employment.
“So the bank will need to watch closely for signs of renewed weakness in the economy over the coming months.”