§ Mr. Gouldasked the Chancellor of the Exchequer how the rate of exchange against the United States dollar compares with that in October 1976; what has been the change in the real exchange rate since that date against the US dollar; and what are the corresponding figures for the effective exchange rate excluding the US dollar.
§ Mr. MooreThe average exchange rate for the pound sterling against the United States dollar in October 1976 was $1.6392. On 24 June 1983, the exchange rate was $1.5476.
Calculations of "real" exchange rates involve applying measures of relative prices to nominal exchange rates. The resulting calculations can vary significantly according to which measures of inflation are used. The correct choice would vary according to the purpose to which the figure was going to be put.
Calculations of sterling's effective exchange rate index against major currencies excluding the United States dollar are not readily available. However, sterling's effective exchange rate index against the currencies currently in the European monetary system would have been 81.8 in October 1976, and was 101.2 on 27 June 1983.