'The Real Sterling Crisis: Why the UK needs
a policy to keep the exchange rate down'

Held on September 19 2016


  • Roger Bootle (Capital Economics)

  • John Mills

  • Liam Halligan (Telegraph)



What should we be talking about at this round-table?
Email your suggestions for the agenda to Harry Atkinson.

Civitas – which bills itself as the Institute for the Study of Civil Society – is just about to publish an important pamphlet on exchange rate policy by one of Britain’s leading economists and the Labour Party’s largest individual donor, both of whom were (and are) active in the debate about the UK’s place in Europe:

Roger Bootle is the founder and chairman of Capital Economics, one of the world’s largest independent economics consultancies. He was formerly Group Chief Economist at HSBC, a member of the Chancellor’s panel of Independent Economic Advisers, a visiting professor at Manchester Business School, economic adviser to Deloitte - und so weiter. What many of us really know him for is his 1996 book, “The Death of Inflation”, which became a best-seller and is widely seen as prophetic.

John Mills is the chairman of JML, a leading consumer goods company. He is also secretary of the Labour Party’s Euro-Safeguards Campaign and of the Labour Economic Policy Group. Prior to the referendum, he was chair of The People’s Pledge, co-chairman of Business for Britain, Vice-chair of Vote Leave etc etc. He is also the author (or co-author) of nine books and numerous articles.

Roger and John’s latest tract takes to task those (eg Rupert Pennant-Rea) who argue that the referendum-inspired bout of sterling weakness was bad news for Britain – and indicative of the damage that ‘Brexit’ will do to UK plc. In their view:

  • a weaker pound is generally good news;
  • the pound has been stuck at too high a level for too long;
  • the absence of some sort of FX policy has hurt the UK; and
  • the tendency of the currency to overshoot has trapped Britain in a chronic current account crisis, undermining competitiveness, damaging manufacturing and hitting productivity.

Are they right? Or is it safer to view the FX rate as an exogenous variable that policy-makers should leave well alone? I am sure that there will be different views around the room, but I am also delighted that Liam Halligan has agreed to kick off the discussion of Roger and John’s paper. Liam is, as you probably know, the author of the weekly ‘Economics Agenda’ column in The Sunday Telegraph. He was formerly an economics correspondent at Channel Four News, and, before that, a political correspondent at the FT. Outside of journalism, he is an Economist/Strategist at New Sparta Holdings and a former chief economist at Prosperity Capital Management.