British pound to US dollar exchange rate (value of one pound in dollars), June 2017 to June 2019 - Edexcel - A-Level Economics A - Question 3 - 2021 - Paper 2

The depreciation of the pound can lead to an improvement in the UK current account by:

1. Increasing exports, as British goods become cheaper for foreign consumers, making them more competitive in international markets.
2. Decreasing imports, as foreign goods become more expensive for UK consumers, potentially leading to a reduction in demand for imported products.

When analyzing the data, reference the change in the exchange rate between 1st January 2018 and 1st January 2019, specifically noting the decline in value during this period.

As the pound depreciates, UK exports should become more appealing to US consumers, which can incentivize an increase in export activities and ultimately support a reduction in the overall deficit in the UK current account.