Flagging UK support for the euro

Britain is a member of the EU but not the euro-zone

UK exporters are turning against the idea of joining the euro with the common currency's popularity at its lowest in two years, a report suggests.

Just 41%, down from 71% five years ago, say joining would benefit their business, the study from DHL says.

Antagonism towards the euro is highest in London, while business leaders in north-west England are most positive.

Many of those questioned said the euro is "unhelpful", and joining would make no difference to their businesses.

The report from DHL, on business attitudes from around 1,000 exporters, comes less than a week after Bank of England governor Mervyn King pointed out there could be a risk to UK economic growth from the strong pound.

Exporters' high hopes

The strengthening currency has made life more difficult for UK's exporters as it makes their goods more expensive for other countries to buy.

Although the pound is regarded as strong in many circles a Confederation of British Business (CBI) survey last week showed export orders were their highest for over seven years.

In the DHL survey exporters are positive over outlook, and in the short term, (over the next three months), confidence over increased orders is at its highest since March 2000.

Slightly more than one-third of firms plan to take on more staff in 2004, a rise of 12% on this time last year, the report says.

Eastern promise

Many businesses also have their arms open in welcome at the prospect of the Eastern European nations, a key destination for UK goods says DHL, joining the EU in May.

And post war Iraq is offering new contract opportunities reflected by the highest year-on-year rise in confidence in the Middle East since 2003, with over half those interviewed by DHL expecting higher exports to the region.

The initial launch of the euro in 1999, was as a currency used by bankers and foreign currency traders.

It has rapidly established itself as a major currency, used as a reserve currency by central banks around the world and big companies when raising funds on the bond markets.