Taking a longer perspective, on either view the economy is going to be well behaved. The difference between a base rate of 5 per cent now and, say, 6.5 per cent next year is small compared with past variations. But even if it is a lesser dilemma than in the past, the Bank will still find itself having to think about raising rates to stay within the target band in late 2000 or early 2001 at the same time that inflation in 1999 threatens to fall below the target.
There will be a good deal of criticism if the MPC goes ahead and raises rates later this year - if not this week - as the markets expect. Yet the UK's inflation target is generously loose in a world where there is little inflationary pressure anywhere. With the price of manufactured goods falling worldwide and a strong pound it would be a scandal if inflation were not in the bottom half of Gordon Brown's range.
Indeed, the Chancellor inherited a 2.5 per cent target, and relaxed it a little by making it the mid-point of a range rather than a ceiling. The time is approaching to toughen it up a little, perhaps under cover of the planned switch to the harmonised European measure. It would certainly ease the MPC's dilemma.