Letter: Strong pound

Walter Grey
Tuesday 14 December 1999 00:02 GMT
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Sir: What has become of the grossly overvalued pound, threatening UK manufacturing with extinction, now that the manufacturing recovery has not only been confirmed but is expected by the CBI to gather further pace next year?

To the extent that the pound's present level is sustainable, as it appears to be, the case for a cut in interest rates to make the pound "more competitive" is weakened. So, too, is the case against joining the euro at anything like the pound's existing rate.

Since the euro cannot have much further to fall, and the pound therefore to rise against it, the outlook for manufacturing, as well as for participation in the euro, is more likely to improve than worsen as time goes on.

WALTER GREY

London N3

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