Government Economist Says Euro Dangerous: Report
October 30, 2000 - 0:0
LONDON A member of the Bank of England Committee which sets Britain's interest rates said the country's economy could be damaged if it adopts the euro, AFP reported.
In an interview with the Sunday Business newspaper, economist Christopher Allsop said membership of the single currency would force Britain to set its interest rates based on economic developments elsewhere in Europe.
"One of the main difficulties is that Britain is rather sensitive to interest rates and might be rather vulnerable to changes in rates, which are based on what's happening in the whole of the European area," he told Sunday Business.
Allsop sits on the influential monetary policy committee, made up of senior bankers and economists.
An academic at Oxford University, he has worked for the Organization for Economic Cooperation and Development in Paris.
The nine-member committee, the brainchild of Chancellor Gordon Brown, is widely credited with keeping inflation down in spite of Britain's strong economic growth.
Meanwhile, about 8,000 people took part in a rally in central London on Saturday to protest about British integration with Europe.
The meeting in Trafalgar Square, a few hundred yards from Downing Street, was organized by the anti-euro democracy movement and United Kingdom Independence Party.
John Redwood, a senior member of the opposition Conservative Party, told the rally that Prime Minister Tony Blair was planning to cede more powers to Europe when he meets fellow European leaders in Nice later this year.
"The Conservative Party says we must have a referendum on further transfers of power to Brussels," said Redwood.
"If Mr. Blair wants to give away more in the Treaty of Nice, he should explain it to the British people and seek our permission." Europe is expected to be a key issue in the next election, which could be called as soon as next spring.
The conservatives have ruled out entry to the single currency for at least the next five years, while the europhile Blair said he would join if economic conditions were right and if the move was supported in a referendum.
Opinion polls show that a small majority of British voters are opposed to membership.
Last month's "no" vote on the euro in Denmark stiffened opposition to the single currency here.
In an interview with the Sunday Business newspaper, economist Christopher Allsop said membership of the single currency would force Britain to set its interest rates based on economic developments elsewhere in Europe.
"One of the main difficulties is that Britain is rather sensitive to interest rates and might be rather vulnerable to changes in rates, which are based on what's happening in the whole of the European area," he told Sunday Business.
Allsop sits on the influential monetary policy committee, made up of senior bankers and economists.
An academic at Oxford University, he has worked for the Organization for Economic Cooperation and Development in Paris.
The nine-member committee, the brainchild of Chancellor Gordon Brown, is widely credited with keeping inflation down in spite of Britain's strong economic growth.
Meanwhile, about 8,000 people took part in a rally in central London on Saturday to protest about British integration with Europe.
The meeting in Trafalgar Square, a few hundred yards from Downing Street, was organized by the anti-euro democracy movement and United Kingdom Independence Party.
John Redwood, a senior member of the opposition Conservative Party, told the rally that Prime Minister Tony Blair was planning to cede more powers to Europe when he meets fellow European leaders in Nice later this year.
"The Conservative Party says we must have a referendum on further transfers of power to Brussels," said Redwood.
"If Mr. Blair wants to give away more in the Treaty of Nice, he should explain it to the British people and seek our permission." Europe is expected to be a key issue in the next election, which could be called as soon as next spring.
The conservatives have ruled out entry to the single currency for at least the next five years, while the europhile Blair said he would join if economic conditions were right and if the move was supported in a referendum.
Opinion polls show that a small majority of British voters are opposed to membership.
Last month's "no" vote on the euro in Denmark stiffened opposition to the single currency here.