Let me explain. The Committee, which contains a mix of Bank of England personnel including governor Mervyn King plus outside economists are instructed by Chancellor Alistair Darling to deliver the official measure of UK inflation at a rate he (and Gordon Brown before him) has set at 2 per cent.

The MPC is allowed a 1 per cent margin either side of the central rate or else the Governor has to write an open letter of explanation. The only tool the MPC has to achieve this goal is the power to alter interest rates by majority voting.

With inflation hitting 3.3 per cent last month (yes, you and I know it's higher but that's the official calculation), the Governor sent what will probably be the first of a series of letters to No.11.

If inflation were truly the MPC's only concern then a majority of its members should have voted for a quarter-point hike to 5.25 per cent instead of no-change in the cost of borrowing at its meeting last Thursday. But with the British economy teetering on the brink of recession any further rise would almost certainly send it...

• Read Full BLOG