The 1931 Devaluation of Sterling

The 1931 devaluation of sterling ended a decade of financial struggle. It marked the collapse of an international financial order that had served the world for generations and had been reconstructed at considerable expense following the First World War. The gold standard parity of sterling, officially re-established in 1925, was a reference point for exchange rate stabilization by a number of countries: France in 1926, Italy in 1927, Norway in 1928, and Portugal in 1929, to name but a few. Thus the pound’s devaluation in 1931 symbolized a radical change in the structure of international economic relations.