Hello and welcome. My name is Sophia Bash and you're listening to the CER podcast.

I'm here today with Simon Tilford, who's the deputy director at the Center for European Reform

and with John Springford, the director of research here at the CER.

They both have agreed to sit down and talk me through the recent changes in the value

of Sterling and what that really means for the British economy.

Thank you both for being here.

Thanks having us.

So since the Brexit referendum in June, the Stirling has fallen around 20%.

And judging from much of the newspaper coverage here in the UK,

that seems to be a great thing, because the fall in the value of the pound will lead to a boost

in British experts. And that makes sense, right? That foreign demand would rise, John?

In the kind of textbook or Economics 101 idea about the relationship between the exchange rate in exports and imports,

if you have a depreciation of your currency then you should see exports rise and imports fall and that should help you to rebalance from some kind of shock.

There's been a fair amount of commentary about this and we thought it would be quite helpful

and we might add something new to just look at some of the, or two in fact, of the past

sterling devaluations.

So we looked at 1992 after Britain crashed out of the exchange rate mechanism, the precursor

to the euro.

And then after 2008, after the financial crisis, we looked in that as well.

The response was quite different.

In 1992, you had a bit more of a textbook response.

Exports grew and imports shrank and the economy rebalanced a bit towards external demand

...