The pound climbs against the dollar to its level in February 2016 before the referendum

This week the pound has reached $1.38, a level it was at in late  February 2016 before the vote on leaving the EU. Its steady climb has received less attention than its previous fall, and is not usually attributed to Brexit in the way some try to explain any decline post the vote. This is a curious asymmetry in the commentary. I also wonder why they thought the pound often fell against other currencies when we were in the EU with no plans to leave.

Various contributors to this site keep alleging that trade would be very difficult under WTO rules with the rest of the EU. They need to explain how it is we have smooth trade with non EU countries at the moment under those same EU rules. They also ignore the fact that our current border  for trade with the rest of the EU is a currency, Excise, VAT, anti smuggling and pro safety border requiring a range of checks and illustrating how much of this work these days is done by electronic manifest and checks that do not delay the flow of goods.


  1. alan jutson
    January 16, 2018

    The pound rises and then pound falls, just like the weather it changes every day.

    Instead of climate change, we could simply call it currency change.

    Any chance that with Carillion now in receivership the Government can claw back all the very expensive PFI agreements that were in place, and make some other more sensible and cost effective arrangements to the running of the establishments involved.

  2. Mike Wilson
    January 16, 2018

    Watching a BBC program the other night (MacMafia I think it is called) it showed someone hacking Mumbai Port Authority’s system. Long story short, as drivers arrived at the security gate they had a bar code showing on their mobile phone – the customs/security guard scanned it – and that was it.

    Is that how it works these days? You do the customs paperwork previously – a code is sent to you – and all you have to do at the port is get that code scanned?

    If that is true – what’s all the fuss about?

  3. Lifelogic
    January 16, 2018

    Indeed and this is despite having an essentially anti-business, high tax & regulation, interventionist government. One that clearly wants a botched Brexitina (in name only), a high cost energy policy, endless government waste everywhere, wants to build on EU employment laws and to attack the gig economy.

    Also despite the appalling threat of Corbyn & Mc Donnall looking rather likely (unless May finally finds a working compass and fires the appalling tax ’til the pips squeak Hammond).

    Philip Hammond – who thinks that the British want to follow the failed “EU economic model” – does he want the wonderful EURO, CAP, EU fishing policy, the working time directives, one size fits all, open door immigration (regardless of quality or criminal record) too I wonder? What a wonderful economic model that has proved to be!

  4. Mike Wilson
    January 16, 2018

    Here’s a thought – having read the thread about food imports/exports to and from the EU – why don’t you, Mr. Redwood, produce some ‘impact assessments’? I realise they, by definition, could not be definite – but by providing the simple facts and figures of how (for example) many cars we buy from / sell to the EU – one could presumably provide an estimate of what effect WTO rules might have.

    I am surprised ‘Leave’ has not produced simple impact assessments to debunk the endless Remain scaremongering about ‘economic castrophe’ and ‘cliff edges’ etc. Leave, as Farage said the other day, needs to start making their case.

  5. fedupsoutherner
    January 16, 2018

    Naturally good news is not allowed John.

    The National Grid is reporting that Scotland will be unable to import power if the erection of further wind farms is allowed and no new gas power stations are built. The whole renewables policy is utterly farcical. Are politicians listening though? In Caithness a wind farm is already operational and receives thousands of pounds on a regular basis to switch off and now the developer is asking for more turbines to be allowed. You couldn’t make it up. How much is all this costing the consumer? Apparently the new transmission lines being put in to cope with fluctuating power will not be able to cope.

  6. Derek Henry
    January 16, 2018

    Look at the real economic data John.

    After 5 US rate hikes the data is as follows.

    December 2015, Dollar Index, 98.
    Today, Dollar Index, 90.

    December 2015, Dollar/yen, 121.00
    Today, dollar/yen, 111.00

    December 2015, Gold, $1050
    Today, Gold, $1330

    December 2015, Oil, $38

    Today, Oil, $64

    December 2015, 10-Yr Treas futures, 127.00
    Today, 10-year Treas futures, 123.00

    December 2015, CPI, 0.7% y-o-y.
    Today, CPI, 2.1% y-o-y.

    That’s because interest rate hikes all else equal are just price hikes as costs gets passed on right across the economy. The mainstream economists ignore the interest income channels. To them they don’t even exist.

    So raising interest rates do th eexact opposite to what central bankers say they will do. They weaken a currency and cause inflation slowly.

    All $ currency pairs paint the same picture.

  7. Ed Mahony
    January 16, 2018

    Why are Tories allowing Boris Johnson play games with our parliament, democracy and everything else. He’s just a spin doctor like Tony Blair, except Tony Blair’s a lawyer, and Boris Johnson a journalist. You can’t base the long-term peace + security of a country on spin. I’m fed up with spin.

    If Johnson becomes Tory leader, then i’m thinking of not voting at all in the next general election.

    1. Ed Mahony
      January 16, 2018

      (meaning Tories lose my vote – i think there are many, many like me who think the same)

      1. Leslie Singleton
        January 16, 2018

        Dear Ed–And there are many many like me who would jump at the chance to have Boris rather than Mrs Sententiously Left Wing May

        1. Ed Mahony
          January 17, 2018

          Boris is in the wrong profession. He should be a man of letters like Samuel Johnson or whoever.
          Jacob Rees-Mogg would make a much better (Brexit) leader, surely?
          1. Ress-Mogg’s a businessman (Johnson’s a journalist)
          2. Jacob stands up for traditional Tory social values such as heterosexual marriage (Boris pushed for gay marriage)

          1. Ed Mahony
            January 17, 2018

            (there are other strong Brexit candidates to lead the Tory party but Jacob is on a populist bandwagon at the moment which could prove useful)

          2. Leslie Singleton
            January 17, 2018

            Dear Ed–I too would prefer Jacob but the options were Boris or May–May comes well down any list

  8. Dennis Zoff
    January 16, 2018

    Good Brexit News – Just keeps on rolling.

    Office for National Statistics – Short-term economic indicators: January 2018

    1. UK Production output up 3.3%
    2. UK Manufacturing output up 3.9%
    3. UK Construction output up 1.6%
    4. UK Trade balance Goods and Services up £4.3Billion

    In short the UK goes from strength to strength and Remainers can’t argue against real facts and figures! The world wants to do business with the UK and is ready to invest in the UK to get it!

    1. Harry
      January 16, 2018

      Yes Dennis..but how will the short term economic indicators be in january 2019 if we don’t get that bespoke deal we want for financial services and other matters like insurance and banking?

      1. libertarian
        January 17, 2018


        I think you’ll find that the city has already settled this matter by using Equivalence rules.

        Meanwhile the EU finance sector is now totally bogged down in the new EU clusterf*** called MiFID 2

        1. Leslie Singleton
          January 17, 2018

          Dear libertarian–Yes–Any read of MiFID 2 is profoundly depressing–multiple Bibles in length for a start–Not seen much if anything from the Remainiacs on this–Keeping their heads down I imagine and one can understand why.

  9. Denis Cooper
    January 16, 2018

    A report on the latest economic indicators is here:

    with three exchange rate charts shown on page 25.

    Sterling has turned up against the dollar after falling since the summer of 2014, but it is continuing to fall against the euro as it has been since the summer of 2015, while overall the sterling trade weighted index has been more or less flat during 2017.

    There are no indications on these charts that the EU referendum result in the summer of 2016 did much to change the trends which were already running.

    1. acorn
      January 16, 2018

      Denis, foreign Treasury/central banks have an unlimited capacity to buy Pounds Sterling. Foreign States that export large to the UK, will endeavour to keep the value of the Pound up, by buying it in the FX markets; so we can afford to keep buying their exports.

      We are basically importing goods made by foreign workers who otherwise, would have been unemployed. As long as those foreigners are prepared to keep some of their savings in Pounds Sterling denominated assets, no problem. If they tire of buying Sterling Gilts; Chelsea mansions; car factories etc; that will be a problem.

      1. Denis Cooper
        January 17, 2018

        Seems more like a non sequitur than a reply, acorn …

  10. Denis Cooper
    January 16, 2018

    As helpfully explained by Labour’s Emily Thornberry:

    “… we have been trading perfectly successfully with the United States for a very long time, they are our biggest trading partner outside the EU without a trading deal anyway.”

  11. Andy
    January 16, 2018

    The value of the £ against the $ is more to do with the weakness of the $ than the strength of the £. It’s worth noting that the £ is still nowhere against the €.

    The point that you fail to understand is that while trading with the EU may still be relatively easy post Brexit, it will not be as easy as it will now. There will be paperwork, or additional customs checks, or additional rules to meet. This will disrupt trade and cause expense.

    You should not be surprised by this. This is what you voted for. It is what Leave means. Deal with it.

    1. NickC
      January 16, 2018

      Andy, We export more to the rest of the world than we do to the EU to the tune of 61% to 39% (assuming 4% of exports for the Rotterdam effect) – Pink Book 2017, 2016 figures. That is despite the RoW being further away; despite your so-called extra paperwork and customs checks, and despite your contention that trading with the EU from within the EU is easier for the UK.

      Beyond trade, the political consequences of Brexit are almost all good. We are leaving an institution which is corrupt, dysfunctional, over-centralising, and undemocractic. Every major EU policy is a failure: from fisheries to regional policy; from the Euro to unemployment; from open borders for criminals to excessive migration.

      If you think the Referendum result can be by-passed, or even overturned, and millions of people won’t feel conned, then you are dreaming. Democracy is regime change without a civil war. If the Remains (you?) throw out this democratic result, what are you left with? It is no exaggeration, Remain is blindly tinkering with the social compact of democracy. It is that serious. I think you need to wake up.

    2. Edward2
      January 16, 2018…you have absolutely no idea how international trade is carried out.
      I’ve spent 30 years dealing with “paperwork”

    3. libertarian
      January 17, 2018


      Oh you are so funny. Those of us that actually do trade internationally are quite capable of dealing with “paperwork” . You people with zero experience of the real world are so interesting when you lecture us on trade and business…. not

  12. Dennis Zoff
    January 16, 2018

    Off track: Just returned from a 4 weeks visit to Germany:

    Quick summary:

    1. People on the ground are waking up to the EU’s shenanigans – better informed

    2. For the first time in many years, Merkel is seen as a spent force – need change

    3. People now openingly questioning the Government’s (Merkel’s) migration strategy.

    4. Even though the German MSM have previously limited the facts on Brexit , German people are slowly realising Germany is going to have to stump up more money – they are not happy with this scenario.

    5. Many Germans still believe the UK is foolish to leave the EU, but is sadly coming to terms with it – on the one hand the UK is a strong competitor and on the other hand it is a nice counterbalance in Europe – Germans are so typically pragmatic.

    6. German manufacturing are very concerned about access to to the UK market, post Brexit – this is real and not imaginary as the Remainers would have you believe!

    I wish more Brits would visit Germany and get the real facts?

    1. Mark B
      January 16, 2018

      Many thanks.

    2. Peter Wood
      January 17, 2018

      DZ, thank you for this report, it is encouraging to hear. Most interested to hear #4, that Germans start to realise that they will have to pay more for the EU project. The counterbalance is that UK should expect demands for more money or face protracted and unsatisfactory terms, right up to the last moment. Sadly, our government seems unable to withstand this pressure.

  13. Ed Mahony
    January 16, 2018

    ‘They need to explain how it is we have smooth trade with non EU countries at the moment under those same EU rules.’

    – How about, why are our exports to non-EU countries so much lower than Germany’s? (the europ helps but there is far more).

    The EU protects those companies that will always find it easier to trade closer to home i.e. in the EU. But being outside the EU won’t dramatically help those companies who want to trade outside the EU. The key here is productivity and creating top quality brands and services that people really want. This is where Germany excels.

    In order to improve our economy, we should look more to Germany (and Sweden, Denmark and the Netherlands) and learn.

  14. Grant
    January 16, 2018

    Currency movements at the moment has more to do with the dollar weakness against a basket of currencies..had nothing to do with brexit

  15. Kenneth
    January 16, 2018

    The BBC today made the following political statement:

    “One of the biggest factors driving inflation has been the inflated price of imports following the Brexit vote feeding through to the shops.”

    The BBC will get a lot more visitors to its page than this page is getting so the remainers will outgun you, Mr Redwood

    1. Derek Henry
      January 16, 2018

      The BBC is talking nonsense.

      People only have a certain amount of money every month to spend. If imports become expensive they buy something else. Then the exporters to the UK have some tough choices to make if they want to keep their market share.

      That is the whole point of flexible exchange rates they adjust.

      Inflation in the UK was higher in 2011/12. Ask the remainders to explain that one.

    2. NickC
      January 16, 2018

      Kenneth, You make a valid point about the bias and reach of the BBC. However the BBC is being increasingly seen as so irredeemably biased that it is beyond saving. It must become pay to view so that those who like its biases (or, amusingly, those who are under the illusion it is not biased) pay for it. It is wrong for the BBC to be universally subsidised.

    3. Anonymous
      January 17, 2018

      After the referendum I recall we had some unecessary Quantitative Easing. This is not mentioned.

      1. Anonymous
        January 17, 2018

        Nor the cut in interest rates.

  16. Bob
    January 16, 2018

    Why are Chucka Ummuna, Anna Soubry and Domonic Grieve still negotiating with Michel Barnier?

    Is David Davis on holiday?

    1. alan jutson
      January 16, 2018


      They are not negotiating, but perhaps simply getting their instructions as to how to best support the EU position within our Parliament.

      The end result a possible better deal for the EU, and a loss for the UK.

      Quite shameful really, quite why Mrs May allows this to go on unchallenged, and for them to remain in the Conservative Party is a mystery to me.
      Perhaps she feels she still has an element of some control over them whilst they are still in the Party ?

      1. Bob
        January 17, 2018

        “Mrs May allows this to go on unchallenged”

        Perhaps she approves.

  17. Denis Cooper
    January 16, 2018

    Off-topic, I’ve just watched with disgust as two strongly pro-EU MPs, one Labour and one Tory, offered encouragement to the unelected legislators-for-life in the “other place” to defy the majority of elected MPs and insist on reinstating amendments to the EU withdrawal Bill which had been fully debated but then rejected in the Commons. In my view those two are among a large number of anti-democrats who should not even be in our Parliament.

    1. Hope
      January 16, 2018

      Will May take the whip or have have Soubry, Morgan, Clarke and Grieve deselected? As you keep pointing out there is no counter from the govt. Hammond at it again falsely stating the electorate wants to mirror the EU economic model! Is he nuts?

      Dennis there cannot be any doubt in your mind that those ignoring govt and party policy are being allowed to do so and, I would say encouraged, to do so on the QT. Cameron previously claimed it was govt policy to remain and acted on it! May should be now doing the opposite. She is trying to be crafty and change the position of govt and party slowly.

      What is concerning is that the leavers are saying and doing nothing about it. May has acted against our vote to leave by phase one of HER unilateral talks. She had no mandate from the electorate to cross all the red lines to keep the U.K. in the EU by another name. The manifesto, once again, not worth the paper it is written on. She is aiming for a technical leave only.

    2. rose
      January 16, 2018

      And I heard Gina Miller introduced on LBC as the Transparency Campaigner, not the Anti-Democracy Campaigner.

  18. Richard Butler
    January 16, 2018

    Things you wont hear from Remainers today;

    + £ back to pre referendum levels
    + Firms have not passed-on the full inflation costs to consumers
    + UK manufacturing in rude health
    + Thousands of EU citizens still choosing to leave the EU each month to settle in Britain despite Remainers claims we’re a nasty, xenophobic place facing ruin
    + 11 border walls / razor wire fences going up across Europe (not a peep from Remainers)

    1. Hope
      January 16, 2018

      No need to. May has acted underhandedly to bring about remain in by another name. She has the votes to do so (by the remain parliament) by allowing those in her party to act freely with Labour to achieve her goal.

      Who in their right mind in any organisation would allow their staff to talk with the those they are negotiating with who are opposed or are prepared to act against the policy of the organisation? They would be sacked, no ifs or buts about it. Moreover, the other party would be warned they only talk or negotiate with the govt, if not all talks would be off. Not in this case, May is allowing this circus to continue to whittle leavers resolve. She needs to be ousted at any cost to domestic politics.

  19. Ian Wragg
    January 16, 2018

    You’re preaching to the converted John. Only problem is we have May and Hammond at the head of Brexit . Neither of them believe we should leave the EU and both expect we will have full regulatory alignment.
    I’m just waiting for the bombshell of an announcement that we will be staying in the single market and customs union which will destroy Westminster.

  20. NickC
    January 16, 2018

    JR, Most of the float down of the GBP was not due to Brexit, of course. On the other hand the recent rise of the GBP vs USD is mainly because the USD is sinking.

  21. acorn
    January 16, 2018

    It is starting to look like the softer the Brexit, the harder the currency.

  22. NickC
    January 16, 2018

    We already trade with the EU under WTO rules. The easy to use WTO website states unequivocally that 98% of global trade takes place using WTO rules. That includes intra-EU trade since the UK and the other EU states within the EU, and the EU itself, are all members of the WTO.

    By leaving the EU, and continuing to trade with the EU under WTO rules, we are simply preventing the EU having political and legal control of our country, and preventing the EU from controlling the 89% of our economy that does not subsist by exporting to the EU. Of course leaving the EU means we also leave the EU’s customs union so that we take back legal and political control of our own internal and RoW trade too.

    1. Hope
      January 16, 2018

      Nick, May has already agreed regulatory alignment for the whole of the U.K. Whether there is a deal or not! This means remaining in the single market and customs union.

      JR, tell and show me that I am wrong.

      1. Chris
        January 17, 2018

        I agree, Hope. Certainly Charles Moore wrote about the early part of the agreement being “complete capitulation” and I have little reason to doubt him. The EU certainly regards that early agreement as set in stone, ready to be effected once all discussions on other matters have ended.

        Any clarification welcome, Mr Redwood.

      2. Denis Cooper
        January 17, 2018

        I would like to be told that you are wrong, and I would like that to happen before Theresa May makes her next big speech in February and potentially commits herself to a Brexit which will not mean Brexit.

    2. Denis Cooper
      January 17, 2018

      I strongly agree that we should insist on “preventing the EU from controlling the 89% of our economy that does not subsist by exporting to the EU”, but I am not sure that even our host, let alone Theresa May, still agrees with that. I would go further and say that the 11% which is involved in selling into the EU Single Market should only be subject to the EU laws which relate to the EU Single Market, which is probably about 21% of the total body of EU laws:

      Hence we could free ourselves of 97% plus of EU laws while still meeting the same basic requirements for our exports to the EU as we do now by virtue of the ECA72 and subsequent legislation,

  23. Chocolate ate-ed
    January 16, 2018

    I hear Nestlé is selling off its sweet businesses, in this one case, “candy” “as it wishes to get into healthier food”. I only wish it had had such a corporate policy before it took over Rowntree making workers redundant in York which the Quakers had managed to keep very well and reasonably employed, housed, paid, for so very long. Not just that but made chocolate tasting like proper chocolate.

  24. Li Jun
    January 16, 2018

    Currencies go up and down for various reasons, often not just one and at one time. It can be a plus too. Only a cheaper GBP will induce certain people when buying in foreign countries to Try it!

  25. Chris
    January 16, 2018

    Praise from the D Express Mr Redwood! It all counts.
    ‘If you voted to leave’ Redwood’s BRILLIANT point SHUTS DOWN Scottish MP’s Brexit argument

    “JOHN REDWOOD made a brilliant point while challenging yet another anti-Brexit complaint from the Scottish National Party’s Joanna Cherry during another heated session debating the EU Withdrawal Bill in the Commons.

    Also, some very significant news about Jacob Rees-Mogg:
    Jacob Rees Mogg’s new Brexit job REVEALED as Eurosceptics vow to battle Cabinet

    JACOB Rees Mogg has vowed to support the Prime Minister in handing ‘control’ back to Britain as the trailblazing Eurosceptic is appointed as Chairman of the influential European Research Group (ERG).

  26. Chris
    January 16, 2018

    The appointment of Jacob Rees-Mogg to chairman of the European Research Group is of enormous significance for Brexit, but more importantly for the country, and also incidentally for the Conservative Party. As one commentator has written tonight:
    “Mr. Rees-Mogg is offering the party a life boat, and should be placed in charge of steering the ship onto dry land”.

    I suspect that if Mr Rees-Mogg is not given a key role in Brexi, in government, and the Cons party hierarchy, then we are indeed lost.

    1. Leslie Singleton
      January 17, 2018

      Dear Chris–Yes–Hand on heart I don’t think he has ever said or implied anything that I have disagreed with–and unfortunately I cannot say that about John, not any more. Apart from anything else, Jacob, if I may call him that (which I say because he has won my respect) finds it so easy and natural to disarm his opponents and ever so politely.

  27. 刘伟 Liu Wei
    January 16, 2018

    Had The British Pound gone up instead of down around the time of the Brexit vote, the Remoaners would have said “It makes our exports more expensive and will create unemployment”. In fact a front bench member of the Labou Party said this on a sudden rise amidst a general flattening of the Pound. Any argument will do for the Remoaners

  28. Jack snell
    January 17, 2018

    NickC..geographically speaking, also politically because of NATO UN and the other affiliations, together with finance, trade, banking, family relationships, holidays in france and Spain- we are all too much involved intergrated with EU countries to make the break that you want without bringing about severe conzequences and hardship for this country, in the main a severe downturn in the economy. All talk about taking back control is just that, sloganeering by politicians who are otherwise bankrupt of ideas and cling to verbiage about how things could be like in the old days..its the death rattle of an old empire that used to be and has long since faded..our future as a people is with the European countries, our neighbours, our friends, one way or another. There is no El Dorado out there in the world.. no new intetnational trade deals that would ever compensate for a loss of being at the top table of the we had all better grow up and get real about all of this before we follow through and do something very stupid.

  29. Miss Brandreth-Jones
    January 17, 2018

    Your blogs are like those moments where men pass the port and women retire to another room to leave the cigar smoking men to ruminate over the price of gold and the like.There are many other females around John who are well informed but would not mind a feminine aspect on life . I see by your photos you have a soft side where small dogs clamber around your neck . How about reaching out politically to women and not Just Mrs T.

  30. hans chr iversen
    January 18, 2018

    the dollar has fallen against all major currencies over the past six months including pounds sterling.
    The fact that the pound fell against European currencies even before the Eu vote is a reflection of a much less competitive UK economy over many years. When I was a kid , we ne paid 20 Danish kroner to one pound , we now pay 8 kroner 50, this is a reflection of a much weaker UK economy over many years, not just after joining the EEC later the EU.

Comments are closed.