Currency strategists can be divided even when they agree. Forecasts for where the pound will be trading against the dollar in 12 months’ time ranged from $1.05 to $1.47 in a Reuters poll published on Oct 6. Even after a flash crash on Oct. 7, it’s fair to say that most pound-watchers expect it to fall further over the coming months. A spat between UK retailer Tesco and supplier Unilever on who takes the hit from a weaker currency suggests businesses too are starting to prepare for sterling to be lower for longer.Clever economic models sometimes underpin such predictions.

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