Close to the second anniversary of Labour's victory, suddenly within Tony Blair's apparently cloudless sky - landslide majority, outlandish poll lead and all - a new threat to Labour's authority appears. It arises from the least expected of places, and from a body that is largely Labour's own creation. After five successive interest rate cuts, the Bank of England now seems to be settling well into its new independence. The threat is that it may be tempted to take that independence a little too seriously.
The Bank is looking chipper again. As home- owners breathe once more, its humiliating public pasting of the autumn has passed. With recession still possible, the spotlight and accompanying national gunge machine - presumably newly acquired from Noel Edmonds - is yet again hanging over the Treasury, despite the warm reception for this week's budget. The tables are turned. Bank staff stride purposefully around the Square Mile. Once again they are emblems of rationality. Even the pink uniforms of the men who check the bags are beginning to look strangely sensible.
They have just cause. The Bank has nimbly performed a Houdini act worthy of high acclaim. Whereas before it seemed that every newspaper, trade union and business competed to slam the job-busters and housebreakers of Threadneedle Street, the atmosphere has fallen strangely silent. For the Bank, that most British of public institutions, the great escape is complete.
Some feel it has been let off too easily. The general secretary of the GMB union, John Edmonds, blames the Bank for interest rate rises and job losses early last year. He and others continue to argue that the Monetary Policy Committee's membership is too academic: it should represent both industry and the regions far better.
But the fresh spring in the officials' step at press conferences, chaired with a graceful swagger by the deputy governor, Mervyn King, is unmistakable. Whereas previously the atmosphere was a little eerie, a little awkward, now King is taking control. Ping! The most elegant efforts of august economics editors are despatched routinely to the back of the net, Michael Owen-style, with a careless flick of a laptop. Wallop! There are jaunty, quirky, confident gags.
The Bank is showing clear signs of well-being as it warms to its brash new independent era. Even the International Monetary Fund has heaped praise upon the institution; in its latest missive, the technocrats of Washington have called the Bank a "model" for macro-management worldwide; the Bank of England is "close to the frontier" of desired transparency.
Over in Whitehall the government should be proud. But here the complications begin. Many in the City now suspect Labour's plan has gone rather wrong: as no one can dismiss the threat of recession, it would have been better for the Bank still to be in the gunsights of public criticism. All recognise the Bank's wise expedient in hasty recent action; as one official said, "you really can't go wrong when you are cutting rates". The further stinging reality within Labour's apparently hyper-successful launch into independent central banking is that the Bank is disconcertingly starting to think for itself.
These are boom times for central bankers. Late to the independence party, both the governor, Eddie George, and King have an eye for history and they will have noted the stellar rise of colleagues such as the now acclaimed celebrity, the Federal Reserve chairman Alan Greenspan, named as one of the top 25 people in America by People magazine. Neither George nor King are, like some predecessors, men happiest in ceremonial mode at formal dinners in the Mansion House. The 60-year-old governor, in sharp contrast to his predecessor Robin Leigh-Pemberton, now Lord Kingsdown (a charming cricket enthusiast who enjoyed a royal garden party and delighted in doubling up as the lord lieutenant of Kent), is a man of more dour tastes who has worked his way from graduate level to his current pre-eminence. King, 50, a former LSE economics professor who would certainly show interest in the senior job when it becomes available, is of similar mould. Together the two men form a pair that represents what many in their employ and beyond would admire most in a modern post-imperial national institution, freed from both past flummeries and former class barriers.
Their influence has pervaded much further than the high-profile field of independent monetary policy. The general atmosphere, as before, leans towards the understated and earnest, almost lordly in its antipathy to showiness. But other things have changed. In the past ten years many of the most welcoming and comfortable armchairs for post-lunch reflection have been moved elsewhere. Personnel divisions that once relied on nods and winks from paternalistic section heads now determine staff members' destinies with suitably bracing outward-bound rural assessment centres. The summer days spent with bat and ball are, well, less critical to one's career prospects.
The bankers' revamped power could affect the entire historical impact of the Blair government. Budgets come and go; Blair knows full well that in 100 years' time it will be remembered in economic terms mostly for its policy, successful or not, of bringing the euro to Britain. But Labour's thriving independent bank is now emerging as the prime potential threat to the campaign.
Elsewhere the coast appears generally clear; from Downing Street's perspective, hitherto declared opposition to EMU largely resembles a gathering of former greats - many of whom are splendid chaps - in a UK Gold-style Morecambe and Wise Christmas special repeat. Few can pose plausibly as opinion-swingers for a new millennium. The Tories seem equally doubtful euro-busters. But a number of senior Bank staff, including George - who dropped fairly undisguised criticisms of the European Central Bank only last week - are well known as sceptics over the single currency. If so inclined, they could be deeply threatening, possibly deadly, to Blair's chances of winning a euro referendum.
By the time of the most likely date for a referendum, George will be nearing the end of his final term as governor. If by then the euro has stabilised, then naturally the move to British membership will be fairly straightforward. But if the currency's weaknesses continue, the temptation for honesty from this most forthright of men - already pretty open with his views - may become too strong. His standing will be high. David Marsh, an expert in Europe's central banks at the investment bank Robert Fleming, notes that by then George will be "along with Wim Duisenberg by far the most experienced senior central banker in Europe".
Elsewhere in euroland there was not a single popular vote cast directly for or against the euro. Central bank opposition was futile. Given the Labour government's commitment to a referendum, however, George's voice, unlike that of his continental colleagues, will count.
The mechanics will be paramount. Should he wish to participate, George will most likely recognise that he has no need to stampede the country, Gladstone-style, to make his feelings known. Instead there will be the gradualist option of a steady series of sceptical noises, exploiting, as Marsh says, interviews, speeches, statements to the Treasury Select Committee and "indiscretions". From Labour's perspective, he may have learnt from the spin-doctors a little too well. But few contest that the electorate's view of him as both an honest broker and almost universally acclaimed expert will be deadly. Bob Worcester, the chairman of MORI, claims that if he so chose, George could have a "lot more effect than the Sun newspaper".
The governor has it all in his hands. There is no legal sanction to prevent him; only form. But these are new waters, new rules, a new world of public life. Most of all, those who know him say that above all he wishes his legacy to be leaving the economy in prosperity. He is also, with just cause, a proud man. It is known that he didn't enjoy being summoned and bounced and having half of his institution - now the Financial Services Authority - amputated within days of Labour taking office. He will bide his time carefully.
Deep within the Bank, he sits smoking a cigarette. Eddie George will savour it to the end. He is the philosopher king updated, a triumph of a new meritocratic Britain. His debts are few. He is free, which is rare in public life, to act as he sees fit.
With his institution billed for imminent effective abolition within Europe's new creation, who would have thought George would have the destiny of a government with a landslide majority clasped in his tar-stained hands?