MPC-watching is sometimes an over-wrought art. But the view that Bank of England interest rate setters have another quarter-point rise in their locker before this year is out received a big boost yesterday when the Bank's newest deputy governor exhibited some distinctly hawkish tendencies.

In his first major newspaper interview, with the Financial Times, formerWhitehall mandarin Sir John Gieve revealed he had seriously considered pushing for another rate rise earlier this month, when the MPC voted 8-0 to keep interest rates on hold at 4.75-per cent. In a comment much more pointed than anything which appeared in last week's minutes of the meeting, he told the FT "the issue was should we move again".

Gieve, deputy governor for financial stability, also hinted he had thought of pushing for a rate rise before the August MPC meeting which voted 6-1 for the only rise so far this year. His apparent determination to take per-emptive action against higher inflation will doubtless reinforce the view among MPC watchers that another rise is on the cards, possibly in November.

Last week's minutes did reveal that, for the only member to vote against a rise in August, MPC newcomer and US resident economist David Blanchflower, the decision had been "a very close call". His concerns about weak labour market data and mixed survey evidence on future activity had "just outweighed" abovetrend growth and concerns about inflation.

With that insight into the dynamic within the committee and another reference in last week's minutes to data since August being "supportive" of the August decision to "reduce the degree of monetary accommodation", the stage now seems set for another quarter-point rise before the year-end.

There is an unresolved question about the impact on inflation of sharply falling crude prices. The barrel price of oil fell brief ly below dollars-60 yesterday. Tesco and Asda responded by further cutting the price of fuel on their forecourts. With the retail price of petrol down around 15-per cent since its recent f lirtation with GBP1 a litre, that's bound to have a knock-on impact on the CPI measure of inf lation.

However, in his interview, Gieve called falling energy prices "a paradox" and suggested that, while they might reduce headline inflation, they might also give a further boost to demand and encourage some price setters to widen their margins and pass on some of the growing costs to customers.

The deputy governor is also concerned about recent growth in import prices. He wonders whether one of the early benefits of globalisation - the flood of much cheaper consumer goods from producers in China and India - may now be coming to an end. If it is, the longer-term inflation outlook in the UK will look more problematical.

Higher UK interest rates will not please our exporting manufacturers. As Gieve's thoughts on MPC strategy were hitting the news stands, the Bank of England was publishing details of a study into Britain's loss of export market share in a whole series of manufacturing sectors over the decade to 2001.

Nine out of 12 sectors had registered declines, some of them quite hefty. And in one of the three sectors where our share continues to grow, communications, the UK trails Hong Kong (9.1-per cent versus 13-per cent). And where our export share is sliding, according to the bank's study, "a dominant depressing influence . . . was the significant appreciation of the sterling exchange in the late 1990s".

Further interest rate rises in November and beyond risk pushing sterling even higher, adding to the problems facing much of what's left of UK manufacturing. In his interview, Gieve touched on two other areas of uncertainty which swayed opinion in the MPC this month.

They were the impact of immigration on the UK labour market and what happens next to the housing market in the United States. The Bank of England is apparently talking to the Home Office about the need for much more robust statistics on the extent of immigration from eastern Europe and its impact on labour supply.

But the MPC also needs to take a view on what these new workers do to overall demand in the economy. Are they here to save? Or will they, as some of them become established here, boost consumption significantly too?

The deputy governor's worries about American house prices is a proxy for familiar worries about what happens next to activity in the US. "The US prospect is critical to the overall world growth picture, " argues this former Treasury man. And again, as he was speaking, the latest evidence on US house prices emerged.

Sales of existing homes across America fell for the fifth month in a row in August. But this was the first year-on-year drop for 11 years. The inventory of unsold homes now stands at nearly four million, an all-time high. Were that decline to turn into the sound of a bubble bursting, at a time when the MPC here in the UK was continuing to tighten monetary conditions, the fall-out, on both sides of the Atlantic, would be serious.