WE are about to witness the next painstaking steps in a delicate balancing act. That's how the Bank of England characterises its current dilemma. Even central bankers can go weak at the knees, it seems, when the consequences of one false move either way become that big.

Will the custodians of UK monetary policy respond to mounting signs that the global credit crunch is now taking an increasing toll on activity in the wider economy by cutting interest rates more aggressively than they have up till now? Put crudely, might they do a Bernanke? Or, for that matter, a Greenspan?

Or, faced with further powerful signals that price pressures are continuing to mount, will Governor Mervyn King and his colleagues on the Bank's Monetary Policy Committee keep rates comparatively high by US and eurozone standards, for fear that the inflation genie escapes its bottle altogether? Even if such monetary discipline risks turning a slowdown into a slump?

Today we discover how much further the target measure of UK inflation (2.5% in March) strayed, in April, nearer the threshold (3%) at which King has to explain himself, in writing, to the Chancellor, Alistair Darling.

Independent forecasts suggest the CPI measure of inflation will be up a point this time, to 2.6%. Any larger lurch towards that 3% ceiling is bound to reinforce the hawk tendency on the committee.

Tomorrow, the Bank releases its latest inflation report. That will clarify its view of how far price pressures are likely to intensify over the next couple of years. The bigger the deterioration in that picture since the last report in February, the stronger the collective reflex back to monetary orthodoxy.

Of course, each of these quarterly set-pieces also has plenty to say about the prospects for UK growth. So this one will be trawled, in minute detail, by City scribblers, for evidence of wobbles, this way or that, up there on that monetary high wire.

Last week's decision by the MPC to keep UK interest rates on hold at 5% was widely interpreted as a wobble in favour of keeping the pressure bearing down on prices, even at the cost of economic activity losing even more momentum.

Many analysts, seeking to have it both ways, are still pencilling in a wobble the other way in June, if news about higher corporate insolvencies, rising home repossessions and slowing overall growth continues to proliferate.

However, given the MPC's unambiguous primary remit to keep inflation in check, why should we expect any such monetary even-handedness? When containing inflation is the name of the main game, why give sustaining growth even a second thought? Because, whatever its formal remit, the Bank knows it operates in a world of real politik.

Stable prices take on a whole different meaning, if the cost of maintaining them turns into prolonged economic stagnation. Central bankers never need to place their fate in the hands of voters. But equally they don't want to go down in history as architects of recession. So they reach for convenient metaphors like "balancing act".

But unlike the acrobat on the high wire - for whom resisting gravity is all that matters, whichever side he wobbles to - the central banker is operating in a multi-faceted economic reality.

This isn't just a simple trade-off - like the fulcrum on the trapeze artist's pole - between growth on the one hand and prices on the other. It's a complex compromise between all the components of growth and, increasingly, with newer kinds of price pressures too, some resistant to well-tested monetary remedies.

Yesterday's factory gate price data produced "horrible"

increases, the biggest rises in more than 20 years. Producers are ramping up their prices on the back of surging input costs. But, so far, despite the Daily Mail's best efforts to persuade everyone otherwise, the impact further down the chain, on consumers, remains more muted.

Some price pressures now affecting us all, like the cost of oil and gas and the prices of some basic foodstuffs and commodities, are down to global pressures on supply and demand, exacerbated by speculation. They are largely beyond the control of national interest rate policy.

There is also a powerful case, here in the UK, for a rebalancing of the components of demand in our economy away from domestic consumption, including a dangerously overheated housing market, and towards greater savings and the production of tradeable goods and services.

The last thing central bankers want is to be bounced, by public unease or political pressure, into such a radical rate-cutting agenda that discredited habits of overspending and overborrowing coming flooding back into the equation.

As Geoffrey Dicks at the Royal Bank of Scotland put it yesterday: "The bottom line is that they (the MPC) dare not let the consumer off the hook - any strength in consumer spending will be immediately swallowed up in higher prices as the pent-up cost increases find their way through."

This is indeed a balancing act. But not one an acrobat would recognise. It is taking place on so many dimensions, across the price and demand spectrums, that the biggest surprise of all is that anyone dares attempt such a manoeuvre.