No doubt fuelled in part by focus group research of voter fears of what will happen to the cost of borrowing under a Labour-Greens coalition, Key rounded on the major Opposition party in a brazen bid to spread the blame for the current increases by predicting Labour's addition to government spending would result in even bigger hikes.
Labour's profligate spending would over-stimulate the economy and ramp up inflationary pressures. Those pressures would force the Reserve Bank to hike up rates well above the two percentage points foreshadowed over the next two years.
Labour could have bet the ranch that sooner or later National would dust off its old "tax and spend" refrain to remind voters of Labour's spending binge at the tail end of the Clark government.
What was surprising - given the Prime Minister's political acumen - was just how ponderous and muddled the attack on Labour turned out to be.
Maybe it was a deliberate attempt to muddy the waters. For example, he absolved National of responsibility by arguing the small increases in the official cash rate simply illustrated the renewed strength of the economy under National.
Not only was Key claiming victory when interest rates went down, but also when they went up.
This was not Key's finest hour. But when this Prime Minister is (rarely) misfiring there is usually an explanation which is not immediately obvious.
Wind the clock back a few months and you might have heard Finance Minister Bill English talking about how - with the economy now on course for solid and sustained growth - the politics of recession had been supplanted by the politics of recovery. It was a statement of the obvious - but not so obvious that many people picked up on it.
English had realised the whole ball game had changed - and not necessarily to National's advantage. With the Treasury forecasting a return to surplus, political parties suddenly had options again.
They could spend more, tax less or pay off debt - or a mixture of all three. The first surplus in 2014-15 will be small, but will start to bulk up in following years.
This will not be carte blanche for another Labour spend-up. David Cunliffe has said Labour will run surpluses so many times that his credibility now hangs on it.
Labour will explain how once it has factored in Treasury's forecasts and projections for things like tax revenue.
What must worry Key is that Labour has become well-versed in making a little go a long way.
With its "baby bonus" plan, Labour got the headlines (though not necessarily ones they wanted). By then delaying the programme's introduction, Labour can argue it is sticking to the fiscal straight-and-narrow.
What the Prime Minister was really trying to do this week was to fit Labour into a fiscal straitjacket.
Key sought advice from the Treasury as to what level of new spending the economy could absorb before it started to overheat. He would not reveal the actual figure. While it was obviously higher than the $1 billion National has set aside for new spending in the Budget, he let it be known it was not that much higher.
Labour is trying to shift the debate on economic management down to a personal level rather than having abstract arguments about arcane budgetary matters.
Labour's strategy involves getting people to ignore the statistical evidence of National's success in moving beyond the politics of recession and instead question whether they are benefiting from the recovery - and if they ever will under National.
It is trying to weave a "narrative" which prompts voters to ask themselves whether New Zealand can still claim to be an egalitarian society and whether they are worried if it is not.
Labour is thus appealing to more base instincts by getting people to ask themselves another, more direct question: do you believe you are getting your fair share?
It is a clever question because - bar the wealthy - no-one is going to answer such a question with an emphatic "yes".
The "fair share" theme is very much part of the story which seeks to isolate National from the great bulk of voters - those on middle incomes downwards - by highlighting things like National's tax cuts and the machinations surrounding the SkyCity national convention centre as National helping only its supposed "rich mates".
This narrative has yet to strike a chord with voters, however.
For the first time in a very long time, the New Zealand economy looks like it will enjoy solid and sustainable growth for some time.
The placid mood of the electorate - and National's continued high opinion poll ratings - are a reflection of the current optimism that New Zealand has finally turned a very important corner.
It is a mood which is the harbinger of one of the most dangerous forces in politics - rising public expectations of what politicians can and must deliver.
That has yet to happen. The public still has its fingers crossed that this time the recovery really is real.
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