The pound has fallen 13pc. Might the IMF have been right to say it was 13pc overvalued?

When the pound plunged a few weeks ago, Andrew Marr opened his Sunday show by saying that this might be a good thing because ‘it had been too high for too long’. It was a minority opinion, and one not seen much in the hysterical reporting of the pound’s plunge. At the Spectator’s post-Autumn Statement briefing last week, kindly sponsored by Old Mutual Global Investors, we raised this a bit. The pound’s fall might make overseas holidays more expensive for Britons, but it also makes our goods far cheaper for the rest of the world. We worry about a worst-case WTO scenario of 10 per cent tariff on cars, for example, but a 13 per cent currency plunge rather makes up for that.

So was the pound overvalued? The IMF carried out a study on this earlier this year, and gave a range – and a midpoint.