The frosty response from the EU to the Prime Ministers latest proposal for a Brexit deal means that there is a high chance that Brexit is delayed again until 31st January. If there is a delay, then at some point the Monetary Policy Committee will have to decide between sitting on its hands until the outlook is more certain and cutting interest rates in response to the recent poor economic data. And while the MPC might not be convinced of the need to cut just yet, the tone of communication has shifted from emphasising the need for rate rises to preparing the ground for the possibility of rates cuts.
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