IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v93y2025i6p569-580.html
   My bibliography  Save this article

The GBPUSD Exchange Rate Over the Last 50 Years

Author

Listed:
  • Nektarios A. Michail

Abstract

This paper examines the reasons behind the long‐run depreciation of the Sterling against the US Dollar. Using data that range from January 1971 to July 2023 and a Vector Error Correction model, the results show that higher UK inflation in the 1970s and early 1980s, as well as the relative overperformance of US markets since 2010 are the main reasons behind the depreciation from 2.41 to 1.29 over the course of 54 years. Other than these two factors, interest rates also appear to have played a role, especially in the 1970s–80s, since the relatively higher bond yields in the UK appear to have prevented the exchange rate from further depreciating. When extending the model to include economic policy uncertainty and geopolitical risk, the above results remain the same, with policy uncertainty having a negative impact on the exchange rate since 2015.

Suggested Citation

  • Nektarios A. Michail, 2025. "The GBPUSD Exchange Rate Over the Last 50 Years," Manchester School, University of Manchester, vol. 93(6), pages 569-580, December.
    • Handle: RePEc:bla:manchs:v:93:y:2025:i:6:p:569-580
    DOI: 10.1111/manc.70002
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/manc.70002
    Download Restriction: no
    File URL: https://libkey.io/10.1111/manc.70002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:93:y:2025:i:6:p:569-580. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.