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 last update was published on 13 March 2019.


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 2017. 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 2017 trade data are now used to calculate the chain-linked ERI from the beginning of 2018 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 13 March 2019) 

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. 

2015 2016 2017 2016-2017
Y-on-Y change1
France 7.3% 7.2% 7.5% 0.3% -0.2% 0.0%
Hong Kong 1.1% 1.0% 1.2% 0.2% 0.1% 0.0%
Ireland 4.4% 4.5%
0.0%  0.1%
Netherlands 6.3% 6.7% 6.9% 0.1% 0.0% 0.2%
Switzerland              3.7% 3.5% 3.2% -0.3% 0.0% -0.1%
USA 19.1% 19.0% 18.0% -1.0% 0.0% -0.3%
Euro area total 47.7% 48.5% 49.0% 0.5% -0.1% 0.4%
RoW total 52.3% 51.5% 51.0% -0.5% 0.1% -0.4%

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 2015 onwards. As a result pre-2015 revisions were omitted for this re-weighting exercise. 

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