Whenever you read that sterling depreciation that occurred immediately after the outcome of the June referendum would be good for the UK economy boosting exports, take it with a pinch of salt and remember the J-curve. J-curve is an economic theory that clearly states that when the exchange rate depreciates, the increase in the export volume takes some time, whereas the cost of imports rise instantly, thus the trade balance looks like a J-curve, declining initially before bouncing in the longer term.

So, the sterling depreciation may not be an immediate boost for the UK economy in real terms. However, we are not dealing with a simple free trade J-curve here and the situation is much more complex than that.

Consider this following hypothetical but somewhat inevitable and plausible situation –

The United Kingdom triggers the Article 50 and the sterling depreciates, further increasing the cost of imports. At that point, it would not be clear, what the future tariffs and regulation would be and thus preventing the exporters of Britain to expand looking at the exchange rate. The things would only start to improve once the deal gets settled. Until then the UK economy would not be a major benefactor of the weaker sterling, especially since the trade balance runs in billions of pounds of deficit.