The BOE is being put to the test in every way.
The government has flip-flopped on policy and the new bent towards austerity should help to cool demand but the timing is tough to predict. Higher rates will work but at 3.00% currently, they're not terribly restrictive. Inflation is running at 11% and the currency is a dog this year. Energy has cooled but it that may only be temporary.
So there's a risk of over-tightening but it's one of many risks.
Other comments:
- Undeniable that the UK is seeing a bigger slowdown in trade than the rest of the world
- UK seeing a really strong stagnation in the services trade