Divide the foreign price by the rate: €50÷1.20=£41.67€50 \div 1.20 = £41.67€50÷1.20=£41.67; €50÷1.17=£42.74€50 \div 1.17 = £42.74€50÷1.17=£42.74. The UK price rises by about £1.07.

Exports become dearer abroad, so exporters tend to lose competitiveness. Imports become cheaper in the UK, so consumers and importers tend to gain.

The exchange of goods and services between one country and another.

A free-trade area removes internal barriers but lets members set their own external rules. A customs union adds a shared external barrier. A single market also allows goods, services, money and workers to move almost freely.