Another cut interest rates to 1.5 per cent looks likely this week. If rates fall even lower, towards zero, the Bank of England will lose its independence to set monetary policy. In an interview with the Financial Times Alastair Darling made it clear that the Bank and the Treasury would have to work 'hand in hand' in these circumstances. Should the Bank need to operate monetary policy by printing money to buy assets, so-called 'quantitative easing', the Treasury would be intimately involved.
Monthly MPC meetings would then lose much of their importance. The nine members would turn up simply to keep interests low while the big decisions were taken at a higher level between the top echelons of the Treasury and the Bank.
The depoliticisation project involved decisions about interest rates being taken away from politicians and made by technical experts based on an analysis of the relevant data. This worked well enough in benovelent economic conditions. It does not work well in a crisis when elected politicians have to get involved and take responsibility.