For a decade, Gordon Brown could bank on the Bank. The Old Lady of Threadneedle Street was the respected bastion of the economic stability of which the former Chancellor, now Prime Minister, was so boastful.

In a paradox in the career of a man now so regularly charged with control freakery, his first big decision, to give away power to the Bank, was to prove his best. That shrewd move, and the sound judgments from Threadneedle St that followed, made the Bank the bulwark of Labour’s and Mr Brown’s reputation for economic competence.

Yet now, with the summer’s Northern Rock debacle and further credit market turmoil having left the reputations of the Bank, the Treasury, and Mr Brown pretty badly tainted it is little wonder that David Cameron suddenly scents political opportunity.

As the Organisation for Economic Cooperation and Development yesterday highlighted dangerous weaknesses in the economy, the Conservative leader wasted little time in highlighting the growing vulnerabilities that have left this Prime Minister’s once all but unassailable credentials as the custodian of stability open to attack.

There will have been immediate sighs of relief in Numbers 10 and 11 yesterday as the Bank again proved itself as an economic guardian. In Downing Street, the economic boost of a rate cut will have been greeted still more enthusiastically as a tonic for flagging poll ratings.

The first cut is always the hardest. And the truth is that this interest rate decision verdict was much tougher than grim economic news in recent days might suggest.

The case for an urgent rate cut looked compelling as the forces threatening to tip the economy into downturn intensified. Yet the Bank knows that its job is not to court popularity, but to curb inflation. It cannot simply take the easy course when soaring oil prices could ignite inflation, and when other worrying signs of price pressures still lurk.

Inflation anxieties may melt like spring snow if the economy now slows sharply. But the big tests will come if they do not, and a fretful Bank then proves hawkish and reluctant to guarantee growth.

The last time the threat of recession loomed, in 2000, Mr Brown was able to shore-up the economy with a public spending spree. His passion for prudence in Labour’s early years allowed him to build up a healthy surplus that gave him the needed fiscal firepower.

Yet Mr Brown’s legacy to Alistair Darling is one of government finances already deep in the red, and set to worsen still more as the slowdown hits tax revenues.

As the OECD pointed out, this means that far from being able to boost spending or cut taxes to buoy a weakening economy, the Chancellor may have to do the opposite if he wants to abide by the self-imposed fiscal rules put in place by Mr Brown.

Alternatively, borrowing could be allowed to climb ever higher and the rules could be watered down or ditched. It is not hard to guess which will seem more appealing to a Government with its eye on electoral prospects. Meanwhile, a wary Governor intent on his job might want to watch his back.

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