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Sunday, October 31, 1999 Published at 15:15 GMT


Business: The Economy

Euro to top CBI conference agenda



The arguments for and against the UK's adoption of the euro are likely to dominate events at the Confederation of British Industry's (CBI) annual conference, which starts on Sunday.

The great and the good from the world of business - plus senior politicians - are gathering in Birmingham for the conference.

Last year's event was dominated by the twin subjects of what was seen to be a looming recession and whether the UK should join the then soon-to-be-launched single currency.

This time round, an impressive cast list - ranging from Prime Minister Tony Blair to Hong Kong's financial secretary Sir Donald Tsang - will be speaking against a background of worldwide growth.

Ahead of the conference, CBI director general Adair Turner is warning the chancellor not to loosen the purse strings.

Such a move risks an interest rate rise being needed to cool down an already booming economy.

Inflation risk

It would also worsen the problem of the two-speed economy, in which service industries were growing rapidly but manufacturing was still struggling to pull itself out of recession, he said.

"If one was simply to have significant tax cuts or spending increases it would pump up further the consumption and the service side of the economy," said Mr Turner.

He said any faster growth in services could prompt the Bank of England to raise interest rates to offset any inflation risk, which in turn would deal a severe blow to manufacturers.

Speakers at the annual conference, which finishes on Tuesday, also include Chancellor Gordon Brown, European commissioner Chris Patten and Conservative leader William Hague.

In a debate on Tuesday morning on the euro, entitled Growth Stimulant or Cold Shower?, Lord Marshal and Rodney Leach will put the pro and anti cases respectively.

Liberal Democrat leader Charles Kennedy and former Tory Defence Secretary Michael Portillo will also take part in the session chaired by the BBC's James Naughtie.

With the dispute over beef exports to France, the UK's relations with euro-zone countries are also certain to feature strongly in speeches by Mr Blair and Mr Hague.

BBC News Online will be providing comprehensive coverage of the CBI conference, with all proceedings broadcast live in audio. A number of the key speeches will also be broadcast live in video on the site. Click 'CBI conference live' in the related stories on the right of your screen for more details.



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