Yet another shock in a seemingly relentless series of economic crises exposes long-held fears over government reliance on central banks for cheap funding, with Britain's looming winter fuel shock now a critical test case.
After almost 15 years of mega-calls on government spending and borrowing to ease households and businesses through serial financial, health and now fuel shocks, the prospect of yet another round of economic bailouts faces uncomfortable metrics.
Unlike those previous calls to arms, central banks are in no position or mood to do the underwriting this time with inflation unhinged.
Due mainly to the standoff with Russia over its invasion of Ukraine, soaring energy prices in Europe, and Britain in particular, mean many families simply won't be able to pay their winter bills.
In Britain, the government is widely expected to have to provide another round of crisis support to prevent a cascade of fuel poverty, consumer defaults, utility stress and a nasty recession.
With wholesale British gas prices up 370% on this time last year and average household energy bills set to climb by more than 3000 pounds in under a 12 month period, more government intervention and support beyond the 30 billion pounds already committed looks almost certain.
UK think tank the Resolution Foundation on Thursday said a "catastrophe is coming" and the new British Prime Minister due to be appointed next month would again have to "think the unthinkable" in terms of policy support.
Earlier this week, there were reports that one of the largest UK energy groups told government ministers they might have to shell out up 100 billion pounds over two years in support for consumers to resolve the problem.
Whether an extreme estimate or not, that's on a scale of COVID support. And with the favourite to become UK Prime Minister, foreign minister Liz Truss, promising largely unfunded tax cuts, the lion's share of any additional bill would likely have to be shouldered by government borrowing.
When crisis borrowing was required during the pandemic or the banking bailout 14 years ago, the cost was subdued by the Bank of England flooring interest rates and buying government bonds to suppress long-term borrowing rates.
"We got used to debt rising but debt interest costs falling. This time both will be heading up together," Resolution Foundation chief executive Torsten Bell noted this week. "That world is obviously one where interactions between fiscal/monetary policy get messy."
THIS TIME IT'S DIFFERENT
In the two prior crises the bogeyman was deflation, which positively required super-easy credit and allowed central banks to stifle the cost of elevated government borrowing via extraordinary bond buying or 'quantitative easing'.
This time it really is very different, with inflation already at the highest in four decades across the western world. Amid pandemic lockdown bottlenecks and now this war-related energy explosion, the BoE reckons Britain's inflation rate could hit 13% later this year and private forecasts see peaks as high as 18% early in 2023.
The BoE has already raised rates six times over the past year to 1.75% and financial markets expect further increases to more than 4% by next March. That's sent 2 and 10-year gilt yields soaring about 100 basis points this month toward 3%, with two-year yields hitting peaks this week not seen since the 2008 banking crash.
But not only is the BoE raising policy rates, it's the first of the G7 central banks to start actively selling government and corporate bonds as it unwinds some 450 billion pounds worth of securities amassed on its balance sheet during pandemic rescues in 2020 and 2021.
While halting reinvestment of maturing gilts, the BoE plans to sell 40 billion pounds of government bonds in the 12 months from September. Governor Andrew Bailey has indicated the bank will seek to cut gilt holdings by 50-100 billion pounds over the first year of so-called "quantitative tightening" (QT).
Markets are braced for a headache if up to 100 billion pounds of additional government funding meets a 100 billion withdrawal by the biggest buyer on the street.
"How do you fund that with higher yields and loosening fiscal policy at the same time?" said Paul Grainger, Schroders' Head of Global Fixed Income and Currency.
There's clearly then a question of whether the BoE feels pressured to halt its QT campaign to prevent rocketing gilt yields - and fears for the Bank's political independence and mandate, which Truss has already pledged to review.
Grainger at Schroders thinks it may be manageable without the Bank halting QT as one solution could be raising the lion's share via short-term Treasury bills rather than long-term gilts.
"If they were to borrow at that sort of level in 10 or 30 years gilts, then we would have a problem - but they have used the bill market before and would likely do so again," he said, adding demand for bonds was also improving and changing policy on QT at this point could inject even more uncertainty.
But amid political pressure on the BoE's mandate over year end, the blurred lines between fiscal and monetary policy may raise questions over whether the Bank can stay focussed on tighter policy enough to put inflation back in the bottle - a nagging fear among investors that may even exaggerate the conundrum.
With government borrowing costs surging across the world, it's a question faced by the European Central Bank and Federal Reserve too - with the former's task complicated by differing multinational stresses in Italy and elsewhere.
For all their claims to operational independence, central banks remain arms of government. How they can remain at arm's length from it over the coming year will now be tested.
Mike Dolan is Reuters Editor-at-Large for Finance & Markets and has worked as an editor, correspondent and columnist at Reuters for the past 26 years - specializing in global economics, policymaking and financial markets across the G7 and emerging economies.