arguments for UK entry into the single currency

Lower transactions costs

Joining the Euro would reduce exchange rate uncertainty for businesses and lower transactions costs for companies and tourists. Nearly 60% of our trade is conducted with other members of the European Union - a figure that is likely to grow in future years

Increased trade and investment

The Euro is vital to the success of the Single European Market. This should lead to an increase in intra-European trade flows and higher inward investment within the EU region. Britain stands to gain from this, particularly if she can maintain low inflation and raise productivity in European markets. Britain's flexible labour and product markets would be highly effective inside a single currency area and would help to attract even more inward investment from outside the European Union

Lower inflation and long term interest rates

Britain might gain from a period of sustained low-inflation delivered by an independent European Central Bank. If inflation falls, this will lead to lower long-term interest rates and stimulate faster growth and improved competitiveness. The currency union will eventually be more resilient than the Exchange Rate Mechanism. The Euro will be less susceptible to speculative attacks in the global foreign exchanges once growth picks up combined with low inflation

The Euro may become a key global reserve currency as part of a new order of currency stability between the Euro, the US dollar and the Japanese Yen " Britain has been a major recipient and beneficiary of foreign direct investment in recent years. Some commentators believe this would be threatened if the UK remained outside the system in the long run.

Political Influence

Britain stands to lose political and economic influence in shaping future economic integration if it remains outside the monetary system.