Post-Brexit uncertainties cloud benefits of cheaper pound

ONE of the arguments made by some proponents of Brexit in the run-up to the British referendum on European Union (EU) membership was that a "Leave" vote would lead to a depreciation of the pound sterling.

These Brexiters got their wish immediately after the vote on June 23. As Bank of England governor Mark Carney pointed out, the pound experienced "the largest two-day fall against the dollar since floating exchange rates were reintroduced almost half a century ago".

Barring a small, short-lived rally, the currency has continued to slide over the last two weeks. Compared to its value on the eve of the referendum, the pound has lost about 13 per cent against the US dollar and the Singapore dollar, 10 per cent against the euro and more than 16 per cent against the Japanese yen. On a trade-weighted basis, it is down more than 10 per cent.