The Importance of a Flexible Exchange Rate

Does a falling currency help or harm the economy? It's an urgent question for the UK, as the pound fell sharply in value against other major currencies after the referendum on Britain’s membership of the European Union in June 2016. Market commentators put this down to foreign investors becoming intensely gloomy about the prospects for the UK economy after Brexit. Others have welcomed the drop, saying it will benefit British exporters. But is it really such a simple, binary question? Paul Johnson, director of the Institute for Fiscal Studies investigates.

Contributors: Richard Barkey, CEO, Imparta Roger Bootle, chairman, Capital Economics Meredith Crowley, reader in international economics at Cambridge university Jane Foley, head of foreign exchange strategy, Rabobank Rain Newton-Smith, chief economist, Conferdation of British Industry Mick Ventola, managing director, Ventola Projects

Producer: Neil Koenig