The Bank of England is back in the markets after the purdah period is over after the United Kingdom’s general elections have passed. Civil servants across the U.K. had to go behind a curtain of silence regarding big decisions or comments that could have an effect on the outcome of the elections. For obvious reasons that prevented the Bank of England members from making comments on the state of the economy and their views going forward. A Conservative majority now in place the BOE is back on the podium.
There have been some developments that have hurt the GBP as economic indicators have come in softer during the election period. The pound has been under pressure as the GDP came in weaker at 0.3%, Manufacturing and Construction have also posted weaker numbers with only the service sector beating expectations. The election results have boosted the GBP as the leadership vacuum has been filled. The central bank will not change the benchmark rate, but the market will welcome the lifting of the veil regarding comments on the economy from policy makers. Later this week the Bank of England will publish the Inflation Report with Governor Mark Carney holding a press conference afterward.