Europe Concerned Over Sterling Slide

The pound’s slide against the euro has begun to trigger concerns on the continent that the UK is seeking to gain a competitive advantage over its European Union partners.

Sterling has fallen by more than 25 per cent on a trade-weighted basis since the autumn of 2007, raising the question as to whether Britain is letting its currency fall to help its exporters at a time when the eurozone is falling more deeply into recession.

Brian Lenihan, the Irish finance minister, in January directly accused the UK of running a policy of “competitive devaluation”, putting other countries under “immense pressure”.

As the pound has stabilised a little in recent months, the Bank of England now sees the benefits of a lower currency, not in rising exports but in a rapid fall in imports contributing positively to economic growth.


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