Of the 27 EU states, 15 (Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain) use the Euro and 12 (Britain, Bulgaria, Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Sweden) don't.
Britain is one of the 12 that don't. But with a recession looming and the Pound falling, how long before Britain involuntarily "joins" the Euro? Within months, the Pound and the Euro could be worth exactly the same.
How long before £1 equals €1? Pound on verge of hitting parity with the euro
By Daily Mail Reporter
10th December 2008
Daily Mail
The pound fell to a new all-time low against the euro this morning as fears deepened over the state of the British economy.
Analysts predicted the currencies could reach parity within months, but there were reports holidaymakers are already exchanging the pound one-for-one for the single currency.
Winter sports enthusiasts will be the first to feel the pinch as traditionally expensive Alpine resorts become even more pricey.
At its lowest point, one pound bought just under 1.14 euros - its weakest-ever showing and a blow for holidaymakers planning festive trips.
According to currency exchange giant Travelex, £100 will currently buy you just over €110.
One-for-one: Tourists could find that a pound will buy just one euro, sending the cost of holidays to the continent soaring
That means a three-course meal with wine in a French restaurant will cost about £42 per person this month, compared to £34 a year ago.
The pound has sunk nearly 20 per cent against the euro in the past year and is down by more than 25 per cent against the dollar since the summer.
It was trading at $1.48 today compared with a recent peak of $2.11 earlier this year.
Mark O'Sullivan, director of trading at Currencies Direct, said he expected to see a 'series of record lows' for the pound against the euro before the end of the year.
He told the Guardian newspaper parity between the currencies could not be ruled out.
The fall comes as growing concerns over a lengthy recession heighten the prospects of UK interest rates falling to all-time lows below 2 per cent next year.
Rates in the eurozone remain higher at 2.5 per cent, despite a 0.75 per cent cut from the European Central Bank last week.
Holidays to resorts such as Courcheval in France will cost up to 25 per cent more than last year
It came after respected think tank the National Institute of Economic and Social Research said the UK economy contracted 1 per cent between September and November and warned 'there was every reason to believe' it would be worse still in the final three months of the year.
The grim predictions cast fresh doubt over Alistair Darling's hopes that growth will resume in the second half of next year.
The Chancellor's forecasts made in the Pre-Budget Report just two weeks ago already look hopelessly optimistic.
If the NIESR is right, official fourth-quarter data released next month will show a decline of more than 1 per cent, putting the start of this recession on a par with that of the early 1990s as High Street sales and factory output slump.
The NIESR said: 'The Government faces the real risk that output will fall more sharply than it expected to the end of next year. The main problem it needs to address very urgently is the availability of bank credit.'
The Bank of England will slash interest rates again in January
The Bank of England has slashed interest rates from 5 per cent to 2 per cent in the past three months in the battle to stave off a deep recession.
The Government has also provided billions of pounds of funding to the UK's banking sector to boost lending to homebuyers and small businesses.
It is being paid for by hundreds of billions of pounds of extra Government borrowing which has resulted in Britain having a worse credit rating than the fast food chain McDonald's and other large companies.
Investing in Government debt is now almost twice as risky as buying McDonald's corporate bonds, according to the market in credit default swaps, a form of insurance for buyers of such debt.
Professor Stephen Haseler, director of the Global Policy institute at London Metropolitan University, said the pound could soon be worth $1 as an 'unfortunate consequence' of Government plans to spend its way out of recession. 'Britain is already in a full-scale sterling crisis,' he said.
dailymail.co.uk
Britain is one of the 12 that don't. But with a recession looming and the Pound falling, how long before Britain involuntarily "joins" the Euro? Within months, the Pound and the Euro could be worth exactly the same.
How long before £1 equals €1? Pound on verge of hitting parity with the euro
By Daily Mail Reporter
10th December 2008
Daily Mail
The pound fell to a new all-time low against the euro this morning as fears deepened over the state of the British economy.
Analysts predicted the currencies could reach parity within months, but there were reports holidaymakers are already exchanging the pound one-for-one for the single currency.
Winter sports enthusiasts will be the first to feel the pinch as traditionally expensive Alpine resorts become even more pricey.
At its lowest point, one pound bought just under 1.14 euros - its weakest-ever showing and a blow for holidaymakers planning festive trips.
According to currency exchange giant Travelex, £100 will currently buy you just over €110.
One-for-one: Tourists could find that a pound will buy just one euro, sending the cost of holidays to the continent soaring
That means a three-course meal with wine in a French restaurant will cost about £42 per person this month, compared to £34 a year ago.
The pound has sunk nearly 20 per cent against the euro in the past year and is down by more than 25 per cent against the dollar since the summer.
It was trading at $1.48 today compared with a recent peak of $2.11 earlier this year.
Mark O'Sullivan, director of trading at Currencies Direct, said he expected to see a 'series of record lows' for the pound against the euro before the end of the year.
He told the Guardian newspaper parity between the currencies could not be ruled out.
The fall comes as growing concerns over a lengthy recession heighten the prospects of UK interest rates falling to all-time lows below 2 per cent next year.
Rates in the eurozone remain higher at 2.5 per cent, despite a 0.75 per cent cut from the European Central Bank last week.
Holidays to resorts such as Courcheval in France will cost up to 25 per cent more than last year
It came after respected think tank the National Institute of Economic and Social Research said the UK economy contracted 1 per cent between September and November and warned 'there was every reason to believe' it would be worse still in the final three months of the year.
The grim predictions cast fresh doubt over Alistair Darling's hopes that growth will resume in the second half of next year.
The Chancellor's forecasts made in the Pre-Budget Report just two weeks ago already look hopelessly optimistic.
If the NIESR is right, official fourth-quarter data released next month will show a decline of more than 1 per cent, putting the start of this recession on a par with that of the early 1990s as High Street sales and factory output slump.
The NIESR said: 'The Government faces the real risk that output will fall more sharply than it expected to the end of next year. The main problem it needs to address very urgently is the availability of bank credit.'
The Bank of England will slash interest rates again in January
The Bank of England has slashed interest rates from 5 per cent to 2 per cent in the past three months in the battle to stave off a deep recession.
The Government has also provided billions of pounds of funding to the UK's banking sector to boost lending to homebuyers and small businesses.
It is being paid for by hundreds of billions of pounds of extra Government borrowing which has resulted in Britain having a worse credit rating than the fast food chain McDonald's and other large companies.
Investing in Government debt is now almost twice as risky as buying McDonald's corporate bonds, according to the market in credit default swaps, a form of insurance for buyers of such debt.
Professor Stephen Haseler, director of the Global Policy institute at London Metropolitan University, said the pound could soon be worth $1 as an 'unfortunate consequence' of Government plans to spend its way out of recession. 'Britain is already in a full-scale sterling crisis,' he said.
dailymail.co.uk