Cazenove's Jeffrey: Curves and shapes

While angst over the longer-term implications of Brexit is still rising, there has also been hope the depreciation in the pound would have a more immediate beneficial impact on trade flows, writes Richard Jeffrey, chief economist at Cazenove Capital.

The normal focus of attention when the effects of currency changes are debated is on exports.  However, a rise in import prices resulting from a fall in the pound should also help companies in domestic markets that are competing with imports. Both effects are mitigated to some extent by the detrimental impact on the production costs of those companies that are using imported raw materials, components and fuels in their production processes. Is ONS data reflecting true economic activity? The story is further complicated by differences in the timings of the various effects. So,...