The troubled state of the UK economy has led to a 25 pct fall in the pound, which has been amazing in its speed. Such a fall could lead to importing higher inflation. A big dose of inflation would sort out our debt problems, if our creditors accept being repaid in depreciated pounds.
There has been fevered speculation that British Prime Minister, Gordon Brown, could choose to enter the euro locking in a low rate. Downing Street has denied plans to join the single currency but are there ideas, proposals, projections etc?
www.searchaccountant.co.uk
Joining the euro would have quite a few advantages for the UK economy such as lower transaction costs with our EU trade partners. However, it might be preferable to wait and see if countries such as Greece and Portugal survive the current downturn and stay in the single currency.
Having an independent currency can act as a shock absorber if we make a complete horlicks of the economy. However, over the long term devaluation is not a road to prosperity. Sterling might be just too small in an era of mega currencies such as the dollar and the euro.
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