The Bank of England is clearly rattled—and so it should be. In the past 10 days, no fewer than five members of its Monetary Policy Committee have made speeches defending aspects of its policy response to the UK's continuing financial crisis.

A flurry of official data Thursday showed why the BOE is on the defensive: House prices fell in February at the fastest rate in two years; in the three months to the end of February, broad money supply suffered its biggest quarterly drop since records began in 1963; borrowing costs are rising for businesses and homeowners and defaults among small and medium-size businesses are rising. The economy contracted by 0.3% in the fourth quarter of 2011, the latest official figures show, and the UK is back in technical recession, reckons the Organisation for Economic Cooperation and Development.