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Monday, 16 September, 2002, 13:01 GMT 14:01 UK
Senior banker warns on euro rate
euro notes
Mr Crockett says it is crucial to join the euro at the right rate
Andrew Crockett, a strong candidate to become the next governor of the Bank of England, has cautioned that competitiveness could be hit if the UK joins the euro at too high an exchange rate.

Mr Crockett was giving a speech to mark the 10th anniversary of sterling's exit from Europe's exchange rate mechanism, ERM.

He said there were dangers in fixing a rate either too high or too low, but that "the dangers of too high a rate may be greater than the dangers of a rate on the low side".

Anti-euro campaigners have claimed that the UK would be forced to re-enter the ERM if it joined the euro.

Euro debate

September 16 1992 became known as Black Wednesday when sterling fell out of the ERM because it was unable to maintain its position within the trading band.

Mr Crockett was the Bank of England's international director at the time, but insisted on Monday that the UK's fall was the result of numerous factors, and should not be seen as an argument against monetary union.

The pound is now also in a much stronger position than 10 years ago and above its target position in the ERM.

Mr Crockett's comments came on the same day that former chancellor Norman Lamont argued against joining the euro.

"I think going into the single currency carries very similar risks to the situation we got into with the ERM," Mr Lamont said.

The current Labour government will decide by mid-2003 if there is a strong enough case for a referendum on the UK joining the euro.


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15 Sep 02 | Business
16 Sep 02 | Politics
12 Sep 02 | Business
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