Both the Bank of England and the European Central Bank left their official interest rates unchanged yesterday, but amid expectations that their next moves will be in opposite directions.
In Britain, the Bank's decision to hold its repo rate at 4.5 per cent for a fifth month was expected. But there is unusual interest among City economists in whether other members of the Bank's Monetary Policy Committee have now joined Stephen Nickell who voted alone for a quarter-point cut in December.
If they have, expectations of a lower r ate in February will become overwhelming.
In Frankfurt, though, the ECB's p resident Jean-Claude Trichet stressed that the European bank is ready to raise its headline rate above the present 2.25 per cent at any time and will be watching inflation "very closely".
In Britain, industry spokesmen took care not to challenge the Bank's judgment this month.
Ian McCafferty, the CBI's chief economic adviser, said: "Until the impact of rising energy prices and wage setting behaviour become clearer the Bank will be reluctant to change its stance. Recent, more positive messages from the high street and the housing market may also provide food for thought.
"But if the better than expected inflation news continues and until the recent retail rally proves sustainable, the Bank needs to remain sensitive to the underlying fragility of the market."
Steven Radley, chief economist at the EEF, supported the Bank's no-change decision pending clearer evidence of the state of Britain's economy, particularly consumer spending. He pointed to a continuing weakness in domestic demand reported by manufacturers, in contrast to their healthy export sales.
He said: "Despite strong exports the weaker home market means manufacturing is currently treading water. If the evidence in the coming months shows that domestic demand remains weak, reductions in interest rates are likely to come back on the agenda."
Mervyn King, the Bank's Governor, has stressed the committee will be watching this month's round of pay deals for signs that last year's jump in energy prices is spilling into earnings.
One economist who doubts whether the cost of borrowing will come down soon is Andrew McLaughlin at Royal Bank of Scotland. "The MPC will be unmoved until the consumer story unfolds in the early months of 2006. Don't expect a cut before Spring," he said.
Stuart Thomson at the stockbroker Charles Stanley warned that the recent pick-up in house prices may also harden the resistance to an early cut on the part of the Bank's interest-rate "hawks".