Quote:
Originally Posted by denphone
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Good.
Cheaper exports. A falling pound improves the competitiveness of UK exporters.
Increases demand for domestic products. Imports are more expensive, therefore consumers are more likely to buy UK goods which increases UK aggregate demand.
A low Pound is beneficial in times of a recession, because it is helping to increase aggregate demand. In 1992, when the UK left the ERM, the pound depreciated and this helped the economy to recover.
The current account deficit should improve as the value of exports rises relative to the value of imports.
