The position of Eddie George, the Governor of the Bank of England, is more complicated. Since he first advised higher interest rates to keep inflation on target at the beginning of May, most of the evidence has gone against him. Sterling has stabilised, output growth has slowed and the frightening bulge in the inflation pipeline looks to have reached its limit. Mr George will by now have a new Bank of England inflation forecast taking these developments into account. It is expected to be a bit less gloomy about inflation than May's forecast, and will give him an excuse for backing down if he wants to.
Should he back down? It is beyond doubt that growth has slowed and will slow further. But GDP in the second quarter was still expanding at a little more than its trend rate, even if lottery fever and financial services rather than manufacturing were the engine. Moreover, the Bank's job is to advise after assessing prospects for meeting the inflation target. It will probably still forecast a breach of the 2.5 per cent target and a climb towards the 4 per cent outer limit next year.
Few people in Britain think such a low inflation target is really, truly desirable. Emotionally, we are all with Ken Clarke. We don't want to hammer those Midland manufacturers or distressed homeowners. That is why the Chancellor gets the final say on interest rates, so he can balance growth against the inflation target. But do not expect Mr George to change his mind. He is, after all, a central banker, not a bleeding-heart Tory politician.