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Last updated at: (Beijing Time) Sunday, April 14, 2002

British Bank Governor Says Pound Must Fall Before Euro Entry

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LONDON, April 12 (Xinhuanet) -- British central bank governor Edward George hinted in Birmingham that the strong pound must fallagainst the euro before Britain enter the single currency, reportsfrom Birmingham said Friday.

George told business leaders that he would welcome a fall in the pound as it would boost the export sector and help correct theimbalance between the recession-hit industry and a consumer boom.

He said he believed the pound's exchange rate would be a key test for British membership.

This is the first time the governor linked the pound to the debate over British membership and came a few weeks after British Prime Minister Tony Blair said the exchange rate would be an "issue" in deciding whether to join.

Some analysts consider it as the sixth test for the entry apartfrom the five tests set by British Finance Ministry which it said must show the membership would not harm British flexibility to adapt to shocks, create better conditions for investment, not harmfinance, boost employment and sustain convergence with the euro economies.

George also hinted he is in no hurry to raise interest rates which is currently at 4 percent after seven cuts last year to avoid recession of the whole economy against the background of theworld economic slowdown.


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