Annual reweighting of the sterling exchange rate index

The Bank of England carries out an annual update of the sterling exchange rate index weights. The next update will be published on 13 March 2019.


On 13 March 2019, the Bank will publish the annual update of the sterling exchange rate index weights. As usual, the annual update takes account of the latest trade data available and will take effect from that date onwards.

The sterling exchange rate index (ERI) is a measure of the overall change in the trade-weighted exchange value of sterling, calculated by weighting together bilateral exchange rates. It is designed to measure changes in the price competitiveness of traded goods and services, and so the weights reflect trade flows in manufactured goods and services. 

Using the USA as an example, the weights for the US dollar in the sterling ERI are based on:

  • competition in the UK domestic market from imports from the USA
  • competition between UK exports and US products in the USA
  • competition between UK and US exports in third-country markets.

The methodology for constructing sterling ERI is explained more fully in the article:

PDFThe new sterling ERI 

Narrow and broad sterling ERI

There are two measures of the sterling ERI available: narrow and broad. 

Countries are included in the narrow index if their share of either UK imports or exports on average over the latest three-year period is greater than 1%.  ERI weights for each selected country are based on the latest available full set of world trade data, currently 2016. The January 2005 average index value is set equal to 100.

The broad version of the sterling ERI uses the same methodology but has an expanded country set. Countries are included in the broad index if their share of UK imports or exports on average over the latest three-year period is greater than 0.5%. 

Countries in the euro-area are included in both the narrow and the broad index whatever their trade share.

To reflect changing trade patterns, the weights and country set are allowed to change over time to give an annually chain-linked index. These weights are updated each year for newly available world trade data, so that weights based on 2016 trade data are now used to calculate the chain-linked ERI from the beginning of 2017 onwards. Revisions to the weights result in small changes to past values of the indices.

Latest sterling ERI weights

We publish new sterling ERI weights in March each year:

ExcelSterling ERI weights (published 14 March 2018) 

This year’s key changes to the narrow sterling ERI

No countries have dropped in or out of the weights following this update.

The table below illustrates the most notable changes to the narrow index from this year's reweighting exercise and shows countries where a new or existing weight has changed by more than 0.2% in absolute terms. The index remains referenced to January 2005=100. 

2014 2015 2016 2015-2016
Y-on-Y change1
China 9.2% 9.3% 9.0% -0.3% 0.0% 0.0%
France 7.8% 7.5% 7.3% -0.2% 0.4% 0.0%
Japan 2.9% 2.9% 3.3% 0.4% 0.0% 0.0%
Netherlands 6.6% 6.3% 6.5% 0.3% -0.2% 0.0%
Norway 1.1% 1.0% 0.8% -0.2% 0.1% 0.1%
Singapore 1.2% 1.2% 1.1% 0.0% 0.0% -0.2%
USA 17.7% 19.1% 19.2% 0.1% 0.0% -0.4%
Euro area total 48.5% 47.8% 48.1% 0.3% 0.1% 0.2%
RoW total 51.5% 52.2% 51.9% -0.3% -0.1% -0.2%

1Differences are due to rounding.

There have been revisions to services imports and exports data from 1999. The most significant revisions to the trade in services data are from 2014 onwards. As a result pre-2014 revisions were omitted for this re-weighting exercise. 

Was this page useful?
Add your details...