The tightrope that the members of the Bank of England's Monetary Policy Committee are walking is getting higher. As they negotiate their balancing act between inflationary pressures and a slowing economy, they report that both sets of risks are deepening.

The Bank's minutes said: "Both the upside and downside risks persisted this month, and some of the news suggested that the risks on both sides might have increased."

Two members of the Committee stepped off the highwire this month, deciding that the need to shore up the economy outweighed any argument for holding rates for another month.

David Blanchflower's vote to cut rates will not surprise anyone. The arch-dove called for a 50 basis point cut in February. But he was joined in his verdict by Sir John Gieve, Deputy Governor of the Bank who is responsible for financial stability. This has led some analysts to conclude that a rate cut may come next month, rather than in May as has been predicted.

But the other seven members of the MPC remain firmly in place on the tightrope, picking their way through the myriad economic data and finding that the risks on each side are still balanced. This, they reason, means rates should stay on hold.

However, these rate-setters also have additional pressure on their shoulders. As well as examining economic data, they must also balance expectations - those of the markets, businesses and consumers.

It seems that managing expectations was a significant factor in their decision to keep rates on hold. "Back-to-back reductions might lead observers to think that the Committee was focusing on downside risks to demand at the expense of the medium-term outlook for inflation."

A rate cut in April would not be "back-to-back", so hopes are high that the rate cut will come sooner rather than later.

Events since the rate meeting also indicate that the MPC may move more quickly than anticipated. The US Federal Reserve yesterday cut rates by a further 75 basis points to 2.25 per cent and, while the Fed's role is to encourage growth, this signal that the US economy is in need of serious help, will likely highlight the downside risks in the UK.

Moderate wage growth will strengthen the argument for a cut, as wage setters seem to have resisted pressure to increase wages in the face of rising prices. This will cool the inflationary pressure.

As the safety net under the highwire gets further away, the MPC may well speed up its plans for further rate cuts.

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