Stephen Byers said he was not attempting to "bullying" the Bank into reducing interest rates.

Stephen Byers: "We will support the bank in the difficult decisions that they have to take"

Speaking on BBC Radio 4's the World at One programme Mr Byers said: "I think it's clear that we have given independence to the Bank of England."

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He brushed aside comments from the Conservatives that he had given clear signals on Monday that he favoured a rate cut.

He said: "The problem I have as chief secretary to the Treasury is that any comment I make, as we saw yesterday evening, can be seen as seeking to bullying or intimidate the Bank of England.

"We have to restate the decision this government has taken to give independence to the Bank of England and will we support the bank in the difficult decisions it will take."

Mr Byers comments come as the Confederation of British Industry called on the Bank to drop rates by 0.5% to help manufacturing.

Responding to comments that a CBI survey shows business confidence at its lowest level since 1980, Mr Byers restated the government's commitment to steering a course for long term stability.

He said Britain was not immune from the downturn in the global economy and turning to the problems faced by manufacturing industry he said: "We have never run away from the fact that in certain areas in particular sectors there are difficulties at the present time."

But he added: "We should not ignore the underlying strengths that do exist in our economy, 400,000 new jobs created since the last election.