On a day when inflation hit a record high and the crisis over the N-deal erupted once again to test the resilience of the UPA, Prime Minister Manmohan Singh on Friday cancelled all his official engagements.

The decision caught political circles by surprise, but there was little explanation from the PMO as to why the PM?for the first time in four-and-a-half years in government?decided to stay away from office on a working day.

Political circles attribute developments in 7, Race Course Road to unambiguous signals from the Left that they will pull the plug on the UPA government if the Centre pushes ahead with the N-deal. Until Thursday, the Congress leadership considered risking the wrath of the Left and had even initiated an exercise to take allies on board over the decision. This came after the PM met Congress president Sonia Gandhi on Wednesday morning and the government subsequently toughened its stand on the deal.

The latest inflation figures, however, is clearly forcing a rethink in the UPA. Many within the Congress itself are clearly unwilling to take a gamble on early elections when inflation is at a record high. The BJP-led NDA, already on a high with a string of successes in state elections, has already stepped up its attack on the government on the price rise issue. The alternate view of going in for early polls by forcing the Left to blink on the deal, however, received a setback with the latest inflation figures.