Denseman on the Rattis

Formerly known as the Widmann Blog


High time to join the euro

When I moved to Scotland five years ago, all the newspapers were full of stuff about whether the UK should replace the pound with the euro, but nobody seems to mention it any more.

I have the feeling people are quietly feeling happy and smug that the UK didn’t join, but I really don’t understand it.

The interest rate in the Eurozone is 3.75% at the moment, while it in the UK is 5.25% and about to rise. Ever since the euro was introduced eight years ago, the highest the euro interest rate has gone is 4.75%, so it’s definitely not just a temporary glitch.

The pound seems to follow the exchange rate of the euro quite closely, so the higher interest rate is not compensated for by a more export-oriented exchange rate.

Why not just ditch the pound and get cheaper mortgages?

Alas, Gordon Brown is no friend of the euro, and I wouldn’t bet the Tories introducing it, either, so I fear its introduction is at least a decade away. 🙁

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