It’s going to be a particularly tough decision for the interest rate setters at the Bank of England this week. With energy bills, rail fares and food prices all rising fast, the ghost of inflation is hovering in the shadows of the octagonal room in Threadneedle Street where the Monetary Policy Committee gathers.

After last month’s rate cut, the case for a pause looks reasonable and the chances are that the MPC will do just that. But these may not be normal times. Here are nine reasons - one for each MPC member - why the Bank should be bolder than usual and cut tomorrow.

1 January is a key month for strategic and capital investment decisions. It is now at the start of the year that business leaders decide whether to press ahead or shelve expansion plans and indeed whether to press the button on cost-cutting measures. If ever there was a moment to send a signal that the Bank is alert to the slowdown and eager to loosen monetary policy as quickly as possible, this is it.

2 The world really has changed – the financial world, that is. It may not be apparent yet but there has been a profound change in bankers’ attitude to risk and their willingness to extend credit. The sea of debt that has buoyed business and asset prices for the past 15 years is receding fast. Banks are rationing credit and are in no mood to turn on the taps again.

3 Most times the economic cycle turns glacially. Policymakers can afford to take their time in adjusting the levers. This, however, is not one of those times. Right now sentiment, both among business people and consumers, is curdling at breakneck pace. This is a time, therefore, for the MPC to move with speed.

4 Economists vary on this but the “neutral” position for base rate is probably 4.5 to 5 per cent. This is the level at which rates are seen as neither braking the economy nor pushing down on the throttle. With rates currently at 5.5 per cent, the Bank is still very much applying brake and that looks perverse when the road ahead is steeply uphill.

5 The baleful impact of house prices. It is hard to overstate the effect they have on consumers. Notwithstanding Halifax’s figures yesterday, the trend looks set for flat prices this year at best. Home-owners, used to the warm feeling from the automatic 10 or 20 per cent appreciation of their homes each year, are going to feel chillier and poorer.

6 Special pleading from the City should be treated with great suspicion. But the financial services industry – one of the biggest private sector drivers of economic growth as well as a major contributor to public coffers and the balance of payments – is facing particular pain because of the credit crunch. A serious downturn in the City would hurt the whole country.

7 A recession in the United States, now a serious possibility, could weaken the dollar against sterling, helping to keep the lid on dollar-denominated import prices and making inflation less of a threat than it might appear.

8 A sharp slowdown in government spending growth is under way. Strains on the nation’s finances have forced Gordon Brown to curb his past largesse. The state spending squeeze will remove another of the key motors behind recent buoyant growth.

9 There is very little danger that a cut would unleash a fresh uptick in the housing market. This is not 2005. Whatever happens to base rate, mortgage bills will remain much higher than then. The banks haven’t fully passed on last month’s cut – another reason to pare again.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive