Lord Goldsmith is not a lucky politician. First he was bludgeoned into declaring the war on Iraq legal. Now he has had to call off the Serious Fraud Office's inquiry into BAe's dealings in Saudi Arabia in order to "balance the need to maintain the rule of law against the wider public interest".

He explained in one breath yesterday that he was legally precluded from taking into account the national economic interest (let alone BAe's) or the possible effect on relations with another state. In the next he told how a raft of his Cabinet colleagues had objected that unless he called off the SFO it would cause "serious damage to UK/Saudi security, intelligence and diplomatic co-operation".

Lord Goldsmith may not resign. We may never learn what happened behind the scenes, who threatened what. It cannot have been pretty. Still, one wonders who drafted the 2001 Anti-Terrorism, Crime and Security Act, which extended corruption laws to bribery overseas.

By 2001 a number of things were abundantly clear.

BAe's Al Yamamah contract with Saudi, worth a reputed #40 billion, had been running for nearly two decades. Britain had been able to bid for it because Congress would have blocked any deal to sell the Saudis American warplanes that could reach Israel. BAe always insisted it won it without doing anything improper.

Elsewhere, Britain competes head-on with Americans for all sorts of contracts. By 2001 they had enacted a law making overseas bribery a crime and appeared to take it rather seriously. Ethical considerations apart, there was a powerful case for Britain to do likewise.

The question was how. Even back in 2001 it was self-evident that a form of words that empowered, or required, the SFO to go scratching round in Switzerland looking for bank accounts belonging to the Saudi royal family would end badly.

Yet it seems the 2001 Act did just that. Did Lord Goldsmith draft it himself? Or did he just nod it through? Let us have a test case, on less fraught ground, to establish the distinction between a commission and a bribe.

The Bank of England needs neither our custom nor our votes. Yet here it is running an opinion poll. It really does need to know what we think is going to happen to inflation. Its nightmare is a surge of determined wage claims by employees seeking to protect their standard of living from a burst of inflation that they see lurking round the corner.

Yesterday's poll, taken after the Bank's November interest rate increase, is on balance reassuring. The most widely held expectation of 2.7 per cent is the highest since 1999, but with no sense of any dramatic "de-coupling" from the Bank's two per cent target.

That is not the voice of a populace girding itself for a round of strikes.

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