The Bank of England was forced to refrain from participating actively in the markets as the U.K. elections were underway. The Conservative win has allowed the central bank to come back into the market and next week the Old lady of Threadneedle Street will have plenty to do. Earlier in the week the monetary policy statement will be released. There is no expectation of a rate change but the comments from BOE members in their meetings with the press will start pouring in to an anxious market. The inflation Report is the highlight of the week for the GBP.
Macro economic conditions have changed since the last Quarterly Inflation Report (QIR). Deflationary pressures from cheaper oil prices have backed down. The forecast from analysts and economist is for no change in the economic expectations of the United Kingdom and with political stability now assured after the elections the message will be optimistic and GBP positive.
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