Why is the pound falling if the UK economy is so strong?

A weak pound tends to reflect worries about the UK economy. But Britain’s economy is growing faster than almost any other in the developed world.

So what’s going on? Why is the value of the pound falling if the UK economy is so strong?  

The value of the pound has been sliding since Britain voted to leave the European Union, dropping by as much as 18 per cent against the dollar and 12 per cent against the euro.

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Taking a pounding: The sterling has weakened since the Brexit vote, but not the economy

At the same time UK growth is predicted to hit around two per cent this year according to the Bank of England – not bad by most standards today.  

Why is the value of the pound so much lower while the economy remains strong and UK shares soar to record highs?

And why does any of this matter to UK households?

In this episode of the Big Money Questions, senior economist at Prudential Portfolio Management Group Leila Butt, has the answers.