David Kern, chief economist at the BCC, said: "In view of the dangers still facing the economy, the MPC must persevere with expansionary policies. Any thought of raising interest rates will merely heighten the risk of a major setback, and must be rejected until the recovery is more secure."

The BCC's warning came after the Organisation for Economic Cooperation and Development (OECD) claimed that the MPC would have to raise rates before the end of the year and to 3.5% by the end of 2011 in order to keep a lid on inflation.

However, Kern argued that the greater risk lay in the possibility of a double-dip recession, fears over which have affected the world's stock markets in the past week.

"Despite some welcome signs of improvement in the economy, growth remains modest and fragile, and businesses still face serious obstacles," said Kern.

"The threat of a double-dip recession is particularly acute at this early stage of the upturn, and the precarious eurozone situation, alongside upheavals in global financial markets, increase risks to the UK."

Kern argued that much hinges on the chancellor George Osborne's Budget, scheduled for 22 June, as the MPC's ability to maintain low interest rates will depend on a credible medium-term plan for tackling the UK's deficit.

"Putting the country's finances on a sound footing will reduce threats to our credit rating and to inflationary expectations, and it will help create the stable background businesses need to drive recovery," said Kern.