1992 or 2008? Updated

Recent news on the economy might suggest that the effects of the pound’s post-referendum depreciation will be closer to those seen after the pound’s fall in 2008 – which raised inflation and squeezed real incomes – than those seen after its 1992 ERM exit, which boosted exports. But it’s too early to give up on 1992. The normal lags mean that the full benefits to the export sector of the more competitive exchange rate have yet to come through, while there are still good reasons why the income squeeze will be much less severe than that after 2008