SOMETIMES this job can get quite spooky. Having written last Sunday’s column early and then headed off for a couple of days’ break, I returned to an answering machine full of excited messages.

During my absence the markets had apparently been abuzz with rumours that there was going to be a resounding demand in this column for an immediate half-point interest-rate cut by the Bank of England. Indeed, it was said, the prospect of such a call was moving the markets. I’m not joking.

Most publicity is good publicity, but this was going a bit far. Apart from the fact that no such piece was planned for last weekend, the idea that the nine members of the Bank’s monetary policy committee (MPC) were waiting nervously for their instructions from me seems a little far-fetched. Armed with this supposed power, I’m tempted to call for a big hike in rates, to see what havoc that would cause tomorrow. But no, the tough choice for the MPC this week is between leaving the base rate on hold at 4% or cutting it, to 3.75% if not 3.5%. What should it do?

The Bank has left rates on hold since last November. If it stays its hand for two more months, this would be the first calendar year since 1959 in which rates remained unchanged. A cut below 4% would give us the lowest rates since early 1955, before one or two members of the MPC were born. As always, the case for doing nothing is pretty strong.

It is reinforced by concerns, always high on the MPC agenda, that Britain’s consumers and homebuyers will respond in a Pavlovian way to a rate cut, exacerbating a situation in which, as new figures show, personal borrowing is rising by 13% and house prices by 24%. In the case of housing, price increases are already well into unsustainable territory and any further stimulus would heighten the risk of boom turning soon to bust.

There are other reasons the Bank might not want to rock the boat. Growth in the third quarter, while helped by a spillover of activity from the second, was a healthy 0.7%. Inflation is edging up, and will probably hit the 2.5% target (from 2.1% now) in the next couple of months. Fortunately, and this is what will make this week’s MPC meeting so interesting, there are also plenty of arguments for grasping the nettle and cutting rates.

Equity markets have recovered a little but remain very jumpy. The global economic recovery looks as secure as a loose tile during last weekend’s gales. The German economy is drifting inexorably towards stagnation and deflation.

This uncertainty has hit business confidence in Britain, with the latest CBI evidence pointing to a sharp drop. More tentatively, it is hitting consumer confidence, particularly in America.

A few weeks ago Alan Greenspan, chairman of the Federal Reserve, was in the Bank. He won’t be joining the MPC this week but, for his influence, he might as well be there. He is set to announce, on Wednesday, a reduction in the Fed Funds rate from an already low 1.75%.

There is, as MPC member Marian Bell said last week, no automatic follow-through from a US rate reduction to a cut here. If the Fed is acting to boost the American economy, the Bank might be able to rest easier about the global economy. In practice, though, the Fed and the Bank would be responding to the same worry — a weaker-than-expected world economy. If the Fed feels the need to cut, the Bank probably would, too. A quarter-point cut would sit easily with a half-point Fed reduction.

At times like this, when the data and the arguments point both ways, it is easy to forget the Bank’s central purpose, achieving 2.5% inflation.

Those close to the process say it is inevitable that the Bank’s new forecast, available for this week’s meeting, will show that inflation, after its temporary rise, is dipping below the 2.5% target and staying there.

Work by economists at Barclays Capital, updating some Bank research commissioned by DeAnne Julius when she was on the MPC, suggests not only that inflation will undershoot the target but that there is a significant risk that it will drop even more sharply.