Jeremy Warner's Outlook: As all around fret over the future of rates, the Bank's view remains one of calm consistency

Investor activism: a patient's tale; BAA: the Government will decide

Tomorrow's quarterly Inflation Report from the Bank of England ought to make for more than usually interesting reading. The December and January meetings of the Monetary Policy Committee were split, with one member voting for a rate cut on both occasions. Speculation has it that the rift will have widened at last week's meeting, minutes for which have yet to be published. Will the report indicate a hardening of the Bank's position, or a softening? The split view on the MPC ought to make the report doubly revealing.

Yet I doubt in practice it will indicate any great shift in outlook. The November report showed GDP growth recovering to just a little above trend in two years time. After dipping a bit, the inflation rate likewise rises back to around target at the two-year forecasting horizon, assuming interest rates remain broadly the same.

Little has happened since then radically to change that view. The data has continued to point both ways. What has changed, however, is the degree of uncertainty in the economy, and here there is room for serious disagreement about where the balance of risk might lie - hence the division of opinion on the MPC.

Since the Bank uses a two-year period for targeting purposes, it may be useful to reflect on what the Governor said this time two years ago. The risks, he observed, were broadly balanced, but nevertheless considerable in both directions. "What this means for policy, only time will tell". Not much change there then.

Investor activism: a patient's tale

Most shareholder activism is practiced behind closed doors between consenting adults. Powerful investors arrange to meet the senior independent director (Sid), unhappiness is expressed, pressure is brought to bear and, hey presto, the chief executive is fired. Only rarely does it come to a fully fledged proxy battle.

It may be just coincidence, but there seem to be a growing number of these fights breaking out into the open right now. There is little honour left in the boardroom it seems; the old approach of the loaded revolver and bottle of whisky left in the library for the miscreant CEO or chairman to do the decent thing, doesn't work any more. Today they have to be dragged out and publicly shot.

The latest such case revolves around Patientline, a company which provides bedside telephone and television services to hospital patients. Shore Capital, with clients representing about 17 per cent of Patientline's shares, wants the chairman, Derek Lewis, out on his ear with immediate effect. The senior independent director, Mair Barnes, is resisting. Mr Lewis should stay, at least until the end of his contract in July, and possibly longer if negotiations with the NHS on charging drag on. Is he right to dig his heels in?

Patientline has been up and running for more than eight years now, but it's never made a penny's worth of profit and in the past four years, the shares have lost 80 per cent of their value. This should come as little surprise to anyone unfortunate enough to have experienced the "service". The business model is based around charging over-the-odds prices to a captive "market" of patients too bedridden to use the alternatives.

In this day and age, with widely available mobile telephony and, through Freeview, perfectly adequate, non-pay multichannel TV, it's questionable that the NHS should be offering Patientline at all. If the policy of banning mobiles operated by most hospitals were removed, Patientline would be toast.

The ban is sustained on the almost certainly mistaken belief that mobile telephony might interfere with the operation of the hospital's equipment. There's virtually no evidence for this assertion, leaving Patientline entirely dependent on the integrity of contracts where hospital trusts commit to use their best endeavours to discourage use of mobiles in the interests of privacy and the avoidance of nuisance. This sort of outdated nonsense surely couldn't be made to stand up in court.

However flawed the business model, it has been made a great deal worse by a board which seems not to have known if it were coming or going. Since flotation five years ago, the company has been through three chief executives and three finance directors. About the only constant is Mr Lewis, a former chief executive of Granada and director general of the prisons service.

Given the turmoil beneath him, you have to wonder whether he's not the cause. In any case, it's hard to see how Barclay Douglas could do any worse, creature of Shore Capital though he plainly is. It's time for Mr Lewis to move over and let someone else have a go. Nothing is gained by allowing him to serve out his notice. The business needs a complete re-think.

BAA: the Government will decide

The Spanish are coming, but will the Government let them? BAA has been a privately owned company for many years now, yet despite the fact that the Government has long since abandoned itsgolden share, the company remains for the purposes of public transport policy a 100 per cent owned subsidiary of the Department of Transport - Ministers pronounce, and within reason, BAA delivers.

Could Grupo Ferrovial be expected to deliver in quite the same way? No owner of BAA would want to do anything else if it were in their interests, but the trade off would plainly be a different one. A different capital structure and a different management with unknown priorities would change the relationship fundamentally.

The key issue on the immediate horizon is the construction of another runway to serve London and the South-east. For environmental reasons, the Government has decided to locate this as a second runway at Stansted. Yet how to pay for it remains largely unresolved.

The low-cost airlines that provide Stansted with the bulk of its traffic are determined that it shouldn't be paid for by them. Higher landing charges would wreak havoc with their low cost business models.

The full service airlines that inhabit Heathrow are equally determined that a second runway at Stansted shouldn't be paid for by them through cross subsidy. It's easy to see why. This is how Stansted's first runway was financed, creating a vast new source of essentially uneconomic capacity which helped underpin the expansion of the low cost operators and undermine the full service airlines. Even today, Stansted fails to pay for its true cost of capital.

Since then, the rules have changed, so that each airport is judged by the regulator on a standalone basis in determining what charges it can levy. In theory, there is no opportunity for cross subsidy, though in practice, the fact that BAA also owns the highly profitable Heathrow still makes it that much easier to tolerate building another slug of uneconomic capacity at Stansted. History looks destined to repeat itself.

All this makes the response we've so far seen from the low cost operators seem an odd one. Stelios Haji-Ioannou, founder of easyJet, says he's against a Spanish takeover of BAA not because he believes Grupo Ferrovial might break BAA up, but because Ferrovial, which already controls Bristol and Belfast airports, would give the combined group an even greater hold over UK aviation than BAA already enjoys.

Well possibly, but if the construction of more capacity at Stansted is paid for by leveraging the company's market power at Heathrow and elsewhere, then surely that's a better outcome for the low cost operators than that they pay for it themselves? In a perfect world, there would be lots of competition in the provision of landing space. In the real world, no infrastructure project of such magnitude and environmental impact gets built unless the Government orders it. Ultimately, it will be the Government that decides how it is financed too.

These are deep and treacherous waters that BAA's chief executive, Mike Clasper has to navigate. Who knows, the Spanish might be even better at it, but it doesn't seem very likely. The risk to them that public policy might suddenly become less accommodative also makes it seem unlikely they'll be persuaded to pay the 900p a share the City demands.

j.warner@independent.co.uk