The 1949 Devaluation of Sterling

  • Sir Alec Cairncross
  • Barry Eichengreen


To those who took part in it, the devaluation of sterling in September 1949, from $4.03 to $2.80 to the pound, was one of the most dramatic episodes in the post-war history of the United Kindom. It seemed likely at the time that it would also prove one of the most important in terms of its effects. There might be room for disagreement as to the need, the purpose, the wisdom or even the significance of the devaluation. But it was unmistakably a turning-point. So rare and startling an event as a fall of 30 per cent in the parity of sterling, the currency in which well over a quarter of the world’s commerce was conducted, could not fail to exercise a powerful influence on international transactions of all kinds.2


Exchange Rate Monetary Policy Prime Minister Current Account Government Expenditure 
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Copyright information

© The Estate of Sir Alec Cairncross and Barry Eichengreen 2003

Authors and Affiliations

  • Sir Alec Cairncross
    • 1
  • Barry Eichengreen
    • 2
  1. 1.St Peter’s CollegeOxfordUK
  2. 2.University of CaliforniaBerkeleyUnited States

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