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The Swift Decline of the British Pound: Evidence from UK Trade-invoicing after the Brexit Vote

Author

Listed:
  • Crowley, Meredith A.
  • Han, Lu
  • Son, Minkyu

Abstract

Using administrative transactions data from the United Kingdom, we document a swift decline in sterling use among British exporters after the 2016 Brexit vote. Through a novel decomposition, we document most of this decline comes from two sources: (i) continuously-operating firms switching from sterling to dollars or local currencies and (ii) reductions in transactions for sterling-loyal firms. In contrast, new entrants into exporting primarily invoice in sterling before and after the Brexit vote. Our findings provide the first evidence on the quantitative relevance of new channels that contribute to changes in aggregate invoicing shares amidst political upheaval.

Suggested Citation

  • Crowley, Meredith A. & Han, Lu & Son, Minkyu, 2024. "The Swift Decline of the British Pound: Evidence from UK Trade-invoicing after the Brexit Vote," CEPR Discussion Papers 18999, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18999
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    Cited by:

    1. is not listed on IDEAS
    2. Son, Minkyu, 2026. "The path to currency internationalization: Insights from the Chinese renminbi," Journal of International Money and Finance, Elsevier, vol. 160(C).
    3. Felipe Benguria & Dennis Novy, 2025. "How to Grow an Invoicing Currency: Micro Evidence from Argentina," CESifo Working Paper Series 11964, CESifo.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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