  We study the relationship between the UV and X-ray variability of the
narrow-line Seyfert 1 galaxy 1H~0707-495. Using a year long {\it Swift}
monitoring and four long {\it XMM-Newton} observations, we perform
cross-correlation analyses of the UV and X-ray light curves, on both long and
short time scales. We also perform time-resolved X-ray spectroscopy on 1-2 ks
scale, and study the relationship between the UV emission and the X-ray
spectral components - soft X-ray excess and a power-law. We find that the UV
and X-ray variations anti-correlate on short, and possibly on long time scales
as well. Our results rule out reprocessing as the dominant mechanism for the UV
variability, as well as the inward propagating fluctuations in the accretion
rate. Absence of a positive correlation between the photon index and the UV
flux suggests that the observed UV emission is unlikely to be the seed photons
for the thermal Comptonisation. We find a strong correlation between the
continuum flux and the soft-excess temperature which implies that the soft
excess is most likely the reprocessed X-ray emission in the inner accretion
disc. Strong X-ray heating of the innermost regions in the disc, due to
gravitational light bending, appears to be an important effect in 1H~0707-495,
giving rise to a significant fraction of the soft excess as reprocessed thermal
emission. We also find indications for a non-static, dynamic X-ray corona,
where either the size or height (or both) vary with time.
