The pound’s value

There is a lot of disinformation about rises and falls in the pound. Some would have you believe we had a stable and strong pound prior to the Brexit vote, and then it fell. The truth is somewhat different.

The crucial cross rate is the Euro rate, given the volume of imports we take from the EU. Sterling fell a lot during the banking crash of the last decade. On 3rd January 2009 it fell as low as Euro 1.04. It rallied in the next decade, typically trading around Euro 1.20 in the period 2010-2014. It hit a low of Euro 1.16 in February and August 2013.

By June 14 2016, just before the vote, it was around Euro 1.25, having been higher in previous months. Today it is at Euro 1.18, just 5% down on the June pre vote low. At today’s level, after rallying in recent weeks, it is around its average earlier this decade.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG40 1XU


  1. Ian Wragg
    May 15, 2017

    Your not up too speed John, anything negative is because of Brexit and anything positive is despite Brexit.

  2. Tall Story
    May 15, 2017

    Fast food is never cheap in that you can cook the same yourself cheaper but not necessarily fast. So, where are our dieticians, nutritionists, NHSers stating the rise in the price of food has increased the nation’s health and led to a massive reduction in obesity and diabetes levels?
    Or, is it with the case of smoking cigarettes, a dramatic fall in cigarette smoking did not lead to a decrease but an actual increase in smoking related diseases because “Detection rates have greatly improved” Have detection rates miraculously improved in spotting big people?
    Or, do we hear a lot of walliness from our media and experts?

    1. Leslie Singleton
      May 15, 2017

      Dear Tall–Why do the French like to eat snails? Because they don’t like fast food (with apologies)

      1. Tall Story
        May 15, 2017


        I really liked that one 🙂

      2. Lifelogic
        May 16, 2017

        But now they do. It has the most McDonald locations per capita in Europe and the fourth-highest rate in the world, now more than 1,200 McDonald’s in France.

        1. hefner
          May 16, 2017

          1200 in the UK too, with 600 as franchises.
          So what is your point, LL?

          1. Tall Story
            May 16, 2017

            Lifelong and hefner. You spoil really good jokes

  3. Jerry
    May 15, 2017

    No one is trying to deign that the FX markets were stable, or that the GBP was strong before last June, all anyone is saying is that the GBP fell shapely after the referendum result, that is a FACT. The USD is actually far more important to the UK in many respects even if we do not import much from the USA.

    “The crucial cross rate is the Euro rate, given the volume of imports we take from the EU.”

    Best tell that to those companies that are having to absorb or pass on higher costs from importing from the Far East, the USA or where the USD is the trading currency of choice. At the beginning of June 2016 the GBP was at 1.48 USD, by June 20th it had fallen to around 1.32 USD, at the beginning of May 2017 the GBP has been on a roller-coaster ride and is at around 1.29 USD. Stop obsessing about the Euro all the time!

    Reply IN the last couple of years the dollar has been strong against all other major currencies.

    1. Jerry
      May 15, 2017

      @JR reply; That might be so but the point of contention is the movement on the FX markets (or any other) just before and just after the referendum result, as has been pointed out many times before the data clearly shows a correlation between the official declaration of the referendum result and a sharp downward movement in the value of the GBP. For almost a year now the GBP-USD FX rate has been fluctuating around the +/- 1.30 area, by rights it should have been in the 1.50 area.

      To misquote Ian Wragg above; for far to many a hard line Brexiteer it seems that anything negative can not possibly be because of Brexit, whilst anything positive can only be because of Brexit…

    2. David Price
      May 15, 2017

      According to City AM on 30th June last year;

      “The governor of the Bank of England has told markets to expect a cut in interest rates as he warned the economy was in for a period of prolonged uncertainty and significantly slower growth in the wake of the EU referendum.

      In his second intervention since the UK voted to walk away from the EU, Carney laid the groundwork for the Bank’s rate-setting monetary policy committee (MPC) to slash interest rates even further below their record low of 0.5 per cent.

      More extreme and unconventional measures, such as quantitative easing, would also be considered by the Bank, with Carney indicating rate cuts or an extension to the £375bn bond-buying programme could come as early as the next MPC meeting on 14 July.”

      I wonder what effect that interference by Carney might of had on the Pound …

      1. Caterpillar
        May 15, 2017


        I suspect the possible Carney effect set the downward spiral when rates did not go up mid to end 2015, despite all the forward guidance. It is around this time that the Excahgne Rate Index turned downwards, when he changed his mind against the previous guidance – hence keeping the too low for too long policy. The ERI has been pretty much downward since then, and the extra drop in rates has just kept it going.

        I do not think the question is what effect he has had, but rather why and whether the governement is supporting it? Although the Conservatives are currently the least worst option, Labour’s comments on “rigged” and the more nuanced criticisms of UKIP’s Flynn do warrant consideration. The PM seems to be trying to wriggle for low paid/working class votes, to some extent acknowledging there is a real issue, but not being strong enough to tackle individuals nor institutional structure, nor tax or monetary structures.

      2. Jerry
        May 16, 2017

        @David Price; See my reply to our host. If the BoE warning was the cause of the GBP tanking, as you seem to be claiming, then there should have been significant movement before overnight June 23-24, never mind up after 10am (official referendum result announced) on June 24th.

        It would have been professionally irresponsible for the BoE not to have issues the warnings they did, akin to a company not issuing profits warning.

    3. Denis Cooper
      May 16, 2017

      It is one fact that sterling experienced a sharp fall against both the dollar and the euro immediately after the referendum. But it is another fact that sterling had already been trending downwards against the dollar for two years, and against the euro for one year, before the referendum; and yet another fact that it would now be very difficult to see from the charts on page 23 in this report:

      when the referendum took place, if the only information available was that it had the effect of knocking back the external value of sterling.

    4. libertarian
      May 21, 2017


      maybe now you understand why financial traders and FX products are so important to import/exporters and manufacturers commodity buying. They will have their so called by you “non job” FX trader buy forward contracts to manage their exposure and risk in fluctuating rates and prices and their treasury team will help your business with hedging advice and planning.

  4. Roy Grainger
    May 15, 2017

    Why is a “strong” pound good anyway ? Germany have done very nicely by having an (artificially) weak currency.

  5. Jack snell
    May 15, 2017

    If the brexit talks go well enough we can expect an increase in the value of the pound, however if the talks go badly and by say, late autumn 2018, we have no agreement in place, and with no other trading options open to us then i’m afraid the pound could weaken greatly. While historical perspective has to be respected.. past performance is not a guarantee of the future outcome..

    1. Ian Wragg
      May 15, 2017

      Jack, my Brother in Law owns a transport company and I said do you think we will have long queues after Brexit and he roared with laughter.
      He told me about 70% of the trucks using the ferry from Dover are foreign owned carrying mainly imported goods from the EU. If there was a tariff war, it would be hugely damaging to the EU 27 transport operators and the producers of fresh and chilled foods. It’s not going too happen and he said nearly half the containers and trucks going back are empty to relocate as there aren’t enough return loads. Trucks coming this way are always fully loaded.

      1. libertarian
        May 22, 2017

        Official Stats for Port of Dover

        The UK imported 6 million containers and exported 4.1 million, and imported 2.7 million vehicles compared to 1.5 million exported.
        In terms of sheer weight most Dover port traffic remains bulk cargoes and particularly liquid bulk, primarily oil and oil related products. Total tonnage remains static at around 503 million tonnes, but this conceals a long running decline in liquid bulk since 2000.

    2. Roy Grainger
      May 15, 2017

      Why are you “afraid” of that ? Why is a weaker pound bad ?

      1. Leslie Singleton
        May 16, 2017

        Dear Roy–Stronger and weaker in this context just beg the question–What’s wrong with higher and lower?

  6. agricola
    May 15, 2017

    Look no further than who benefits from movement of Sterling against the Euro. Individuals have I believe been prosecuted for deliberately manipulating exchange rates, presumable to benefit the businesses they worked for and their own bonuses. It has also been suggested that government via the BoE have also indulged in manipulation because it suits their political narrative. All of which will be unprovable. It only requires the governor of the BoE to express an opinion and Sterling moves accordingly. It happened only last week. His opinions are historically suspect, but merely expressing them can have an effect. Check out who benefits.

    One thing for sure is that it will never remain static because movement is the essential ingredient of profit. In the real world when you take into account the level of lending that will never get repaid, the Greeks owe the ECB around Euros 220 Bn., and the very shaky state of their banks, Deutsche Bank are exposed to $46 Trillion in derivatives, it is the Euro that is greatly overvalued. It will hoover about at it’s present level for some time yet. The crunch will come when the Euro falls apart for political and financial reasons within the EU.

  7. Lifelogic
    May 15, 2017

    Not doing that badly given the big government, high tax, borrow & waste, misguided, interventionist approach of Hammond and May. Still is would certainly fall a lot if it looked at all likely that a Corbyn dog, wagged by the tail by Nikola Sturgeon might be elected.

    1. Leslie Singleton
      May 15, 2017

      Dear Lifelogic–I hope I heard it wrong but if not you need to add to your normal list that Mrs May plans not just gender reporting but reporting of the pay of different ethnicities. What a World we have come to when such can pay dividends, as I recognise it can, politically.

      1. Mitchel
        May 16, 2017

        Empowering minorities against the centre/majority is straight out of the Bolshevik handbook.See also devolution.

        “Nationalist in form,socialist in content”

      2. rose
        May 16, 2017

        Ethnicities, yes, but foreigners? Has that now been dropped under pressure from the usual quarters?

  8. Briton
    May 15, 2017

    If we had the Euro, especially in the course of Brexit, we would be in a proper pickle wouldn’t we. The fact our currency exchange rate shows mobility is a plus. 9th june should show a swift upward movement and a lowering of the FTSE 100 for a little while. The almost immediate disintegration of HM Opposition will show a further increase in the Pound. A nervous move by competitors within the SNP to challenge Mr Sturgeon will strenghen the Pound further. Post General Election ,the SNP will lose its cockiness for a positive Independence vote and will spell doom for their individual political careers if the seemingly neverending dream of independence is dented; yet, some dolt still goes for another independence vote.

  9. Andy Marlot
    May 15, 2017

    A strong pound is something we certainly haven’t got or ever had since the end of the gold standard. Central banking has destroyed it’s value and impoverished the people all concealed by debt and subsidy.

  10. alan jutson
    May 15, 2017

    It goes up it comes down, it goes up again, it comes down again, the same as any other currency in the World when you compare one with another.

    You used to get 4 dollars to the pound decades ago, but we still cope.

    Always remember Harold Wilson and his famous, “the pound in your pocket” statement.
    Was wrong and right at the same time, as it is now.

  11. Newmania
    May 15, 2017

    Uhuh and similarly the Titanic is misrepresented; 8000 miles of trouble free cruising , I say !
    Bridge over the river Kwai – State infrastructure project brought in on time and under budget !

    Anyhoo we usually means the dollar when we refer it the exchange rate due to its volume of trade and preeminent reserve currency status. The Brexit disaster started to be priced in way before the dark day itself
    From a healthy recovering 2015 it began its slide form around 1.6 (nearly)( down to just over 1.2 following two step changes that are unmistakably Brexit related . The usual figure is roughly 20 % but actually that understates it considerably in my own view
    I regularly wonder of Pollyanna Redwood can possibly believe the things he writes but there is no doubt with this one . He does not, well that or early onset dementia and I wouldn`t wish that on him.

    Oh rats just chopped my leg off in a horrific freak accident – Fantastic hopping opportunity !!!!




    1. Richard1
      May 15, 2017

      How come the CHF is so strong when Switzerland has been dumb enough – presumably your view – to stay out of the EU (& the single market etc)?

    2. Know-dice
      May 16, 2017

      Some Pound/Euro figures from the last ten years:

      Last high – 18th July 2015 – 1.44072
      Last low – 1st Nov 2016 – 1.10677

      Previous high – 25th July 2007 – 1.49592
      Previous low – 31st Dec 2008 – 1.02271

    3. Denis Cooper
      May 16, 2017

      “Anyhoo we usually means the dollar when we refer it the exchange rate … ”

      You may do, I don’t. Sterling trade weighted index for me, thanks.

  12. Martin
    May 15, 2017

    Disinformation ? What about year 2001 Pound bought over €1.60 !

  13. John Probert
    May 15, 2017

    Yes I agree the pound came off a false high anyway because they were all trading it

    Problem was they bet the wrong way so it went from a false high to a false low.

  14. John
    May 15, 2017

    Yes its all bizaar! At most I had the fall as between 7 and 9 % depending on when you took it.

    The price has been very stable since but we are fed all kinds of headlines suggesting otherwise.

    We had to put up with 10 months of commentators saying that the pound is 20% down without correction.

    My understanding is that it hit 19% on the 24th June for a short time, ie and hour. We are led to believe all UK companies that import goods chose to purchased their goods for the whole year in that hour.

    I find Sky News Politics program funny. Every advert they follow with the price of Sterling and the FTSE. Yet few on that show take any notice. Mr B isn’t all that bad himself, just the choice of guests.

    I have the privilege of being fed investment commentary from our Investment expert. He certainly is too. I remember up to end of 2016 him delivering very good commentary on the influence of China and the US on our growth and interest rates. Rather too much Brexit focused since.

    1. Newmania
      May 16, 2017

      If you look up any handy graph on the inter web you will see that what you have just written is charmingly incorrect . It is the dollar rate that is the generally accepted mark and then pound has dropped at least 205%due to Brexit. I think a lot more but as you say it depends where you start.
      You Lord Haw Haws should get your story straight I have had to endure months of bonkers nonsesnse about the drop in the pound being good for exports

      1. Denis Cooper
        May 16, 2017

        It’s the dollar rate if that best suits the story, or it’s the euro rate if that best suits the story. Personally I always prefer the sterling trade weighted index; which is now down about 8% from its level at the time of the referendum nearly a year ago, which was in its turn about 7% lower than a year before. You can see a chart on page 23 of this report:

      2. John
        May 16, 2017

        More of our imports are in Euros, we import more than double from Germany than the whole of the US alone. And what’s the point in your made up facts, 205%! You are only ever going to be proved wrong all the time.

  15. margaret
    May 15, 2017

    If you accept that the pound sterling historically is the oldest coinage and we remain in the top 4 traders and also that the value almost changes like the wind , then why worry at all? The cycles derive from man made fear. Fiat money will always be based on just that. We will not be engulfed by the 3rd ranking Euro. We have history the yen and the US dollar.

  16. Ken Moore
    May 15, 2017

    More making it up on the hoof stuff.

    No analysis of the devastating effect it will have on small businesses of the loss of key employees for ‘unpaid leave’. Any idea where this mad idea came from Dr Redwood.?
    Was it Mrs Mays breakfast table…a focus group.?
    No detail about brexit and nothing on deficit reduction.
    And they call this ‘strong and stable leadership’.
    Leadership is about making the right decisions not handing out candy in a sweet shop.
    God help us.

  17. Prigger
    May 16, 2017

    There has not been a joint announcement and specific advice by the UK, USA, EU, Russia, China, India and others in cooperation with ALL internet Security companies of what the individual computer operative on their Home Computers should do, NOW.|There ought to be a “patch”as they call it which everyone can download, as should be recommended by HM Government. One could understand and appreciate the lack of coordination if the computer had never come into existence. But as we all know, computers are purpose-built to coordinate such world-wide responses to an emergency

    1. Denis Cooper
      May 16, 2017

      There is a patch available but there are always a lot of people who don’t download all the patches and updates for various reasons. They didn’t notice it was available, it got sent to spam or junk and was ignored, they were too busy, they were afraid they would have to pay for it, they were not sure what to do with it, they knew what to do with it but were worried that downloading it might make unwanted system changes which would disrupt their familiar way of working, the person who usually dealt with such things in a office had left or was away for some reason etc, etc, etc. It seems common for a company IT section to find that despite multiple advance warnings, and even large reminder notices put up in entrance foyers, when the day comes for some system change or migration or whatever a significant number of users claim that they were never told about it, or they admit knowing about it but say they hadn’t done anything because they were unsure whether they needed to take some action or not, etc etc etc. I’m not surprised that NHS Digital sent out warnings and information about the patch which some trusts just ignored.

      1. margaret
        May 16, 2017

        we were switched off for 15mins today whilst the computers were all scanned. You would not believe how difficult it is without all patient info on the monitor in front of you at a consultation. We are dependent on cyber info.

        1. Denis Cooper
          May 17, 2017

          But it’s largely what you’ve grown used to, isn’t it? Which is one reason why a lot of IT users don’t like changes which may mean that they have to relearn how to use the system – even if it is still possible to use the new system in the way they’re accustomed to use the present system, which is not always the case. Years ago I started to use local storage folders in a certain mail tool as a filing system, now that software is no longer supported and moreover I have to work around a number of new obstacles which have gradually slipped in, but I know that it will be a major task to change it all over to a new system so I just stick with it for the present even though that is not good for my efficiency and is increasingly risky.

  18. acorn
    May 16, 2017

    A picture speaks a thousand words. Have a look at*&fd=1&fm=1&fy=1993&ld=31&lm=12&ly=2017&y=daily&q=volume&f=svg&a=lin&m=0&x=

    The chart shows the relative strengths of the US$ and the € against the Pound. I have started the chart at 1992, which is when the ECU / Euro “Unit of Account” really went public.

    The Pound took a dive in 08, which shows as increasing strength of the two currencies plotted. That is, each of them could buy a lot more Pounds for tourists visiting the UK.

    1. Denis Cooper
      May 16, 2017

      And that particular picture tells us very clearly that sterling’s most recent downwards trend against the dollar started not at the time of the EU referendum last June but two years before that in the summer of 2014; while sterling’s most recent downwards trend against the euro started in the summer of 2015, a year before the referendum; and in neither case is then any clear sign that something happened in the summer of 2016 which radically changed the already established downwards trend.

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