Will the pound disappear?

I heard the talks over the internet that pound will disappear and the UK will be using euro instead. How probable is this varient? anyone from the UK can share their views. I care because Pound has nice volatility during london and ny sessions to the contrast with euro and other pairs. If it will disappear it will be very sad.

can't see it happening in the short term.

euro hasn't done ireland any favours in the longer term.

is it more likely the euro will disappear?

according to a few economist over there the UK will never give up the pound. For starters if they give up conntrol of their money supply they cant changes things(like devalue it) when things go bad. The issue the other Euro countries are having is because they have zero control of the money supply. I guess it is the true golden rule.

It won't happen any time soon. I hope it doesn't happen to be honest.

I hope they wont give up the pound. But my concern was also because on the background of these gossips euro/gbp chart looked as if it was heading for 1:1

I would say that this is more likely

No intention to be a "wise guy", but something tells me that if the UK started using the Euro, there would be plenty of volatility going on.

As for the probability, I wouldnt know? I would say it is slim as there have been just as many rumors and theories about countries jumping away from the Euro as there are the UK picking it up. Now, if the super high liability that the UK banks has gets stampeded and their nations goes broke, then they may need a way out, joining the EU and adopting their currency may be that way?

Yes, that is what I was considering when the TRY was going very strong. If it could close a large gap and move near the 1:1 ratio with the Euro, perhaps the transition would be smoother? I dont know if it is the proper way to look at things, but it sort of makes sense. A lot of folks were looking at the USD/CAD going 1:1 also. Interesting perspective, but I would assume they would manuever in such a way that the ratios wouldnt matter all that much.

if the pound's volatility will be saved then nothing to worry about. But still we'll have fewer trading opportunities without gbp/usd, gbp/jpy and gbp/chf.

As far as I know there is bigger pressure from European Central Bank on UK to switch to euro, and plenty of misleadig responses, that Britan can pick euro when it find good moment for that. Some german politican even said that if they don't accept euro, why don't they quit EU?

In general it looks quite obvious not a single briton likes euro.

Btw who would like to swich from bills with Darwin and Smith on it to bills with soe lousy windows or bridges [that's one of the reason why euro is piece of *** nothing]

The British public certainly don't want it but that's not to say it won't happen. It will probably be the next step in the "New World Order" cunningly disguised and sold as unilateralism. </sarcasm>

There is a big fight brewing in the Euro zone right now. It is all the countries that switched to the euro rethinking it. They have lost the power to set their own interest rates and to adjust the money supply. In the past 4 weeks their have been many articles printed about going back to the local currencies that existed before the euro. Many of the locals governments are starting to rethink the euro. So either way for us currency traders the next few years will be real interesting.

I wouldn't mind having few pounds of my own disappear ...

You and I both!

The currency of the monarch down the gurgler?

Will believe it when I see it.

This is an interesting read and I would say that the pound isn't going away anytime soon - not if the memory of the first attempt to convert to the euro is fresh still in many minds. George Soros is thinking maybe he'll get a chance to do it again.
Cached google link
Sep 16, 2007
Fifteen years ago today, British politics changed forever. The Tories, who had won four consecutive elections, were plunged into the low 30s in the polls and except for the briefest blip during the 2000 fuel crisis remained stuck there.

John Major outside No 10 after the Black Wednesday crisis
Black Wednesday, the day that sterling was forced out of the Exchange Rate Mechanism, twisted the old parameters of party politics out of all recognition. Until then, in the impressionistic way that most people view the parties, the Tories were seen as uncaring but competent, Labour as cuddly but inept. 16 September 1992 altered that equation utterly. From that date, the Tories ceased to be the hard-faced hommes d'affaires whom you would trust in a crisis. For the next 15 years, they were seen as uncaring and incompetent. The worst of it, as I have written in today's Sunday Telegraph, is I can't shake off the suspicion that the whole business might have been my fault.
Much of the political fall-out was, of course, merited. John Major had identified himself utterly with ERM membership: indeed, he had called for it in his maiden speech in 1979. During the 23 months of membership, he kept insisting that leaving would be "the devaluer's option, the inflationary option". In fact, leaving the system was the beginning of the prosperity that Britain has enjoyed ever since: inflation, interest rates and unemployment fell immediately, and Britain began the longest period of continuous growth in its history. Many voters drew the understandable conclusion that the Major government had been prepared to inflict a recession on the country rather than own up to a mistake.
Inevitably, the collapse of the government's central policy prompted recriminations. The Euro-sceptics despised John Major for having been wrong; he resented them for having been right. The Conservatives thus lost their two chief assets overnight: their reputation for economic competence and their unity.
What is perhaps unfair is that the Conservatives should have got the sole blame for the disaster. The Tories, after all, had held out against ERM membership for longer than anyone else. It is often forgotten that almost everyone had been pushing the reluctant government to join: the TUC, the CBI, most of Fleet Street and, above all, the other two parties. And if Labour and the Lib-Dems thought we had joined in inauspicious circumstances, they didn't say so at the time.
Here, for example, is Neil Kinnock writing in 1990: "The ERM provides the stability which enables us to achieve economic growth and a rise in living standards".
Here is the self-important Chris Huhne, now the Lib-Dem environment spokesman, in 1991: "Britain's belated membership of the ERM has proved to be a greater success than almost anyone expected. We have discovered, 11 years after most of our European partners, that fixed exchange rates make sense".
The notion that we "joined at the wrong rate", which suddenly came into vogue after the event, is in any case demonstrably false. The idea that 3 DM to the pound was too high a rate is hard to reconcile with it having been too low a rate two years before; or, for that matter, with the pound having recovered this level by 1998. The plain fact is that there is no permanently right rate.
The Conservatives were at least quick to absorb this lesson: one of William Hague's first acts when he took over from John Major in 1997 was to apologise for the ERM and promise not to repeat the mistake. Not so the Kinnocks and Huhnes, who continue to demand that we join a permanent version of the ERM: the euro. Yet, perversely, Black Wednesday remains a stick to beat the Tories with, rather than the parties which want to go through the whole wretched experience again.
The funny thing is that their arguments for abandoning the pound today are exactly the same as their arguments for joining the ERM in the 1980s. Then, as now, Euro-enthusiasts claimed that it would boost business. In fact, more than 100,000 firms went bankrupt during our 23 months of membership. Then, as now, they promised that it would create jobs. In fact, unemployment doubled to just under 3 million. Then, as now, they claimed that it would bring lower interest rates. But interest rates were in double figures for most of our time in the system despite inflation at barely three per cent and 1.75 million homes were overtaken by negative equity. Then, as now, they assured us that it would bring stability. In the event, our trade-weighted exchange rate was less stable during membership than before or since.
If these people had been employed as the forecasters in the private sector, they would be out of a job. But, because pro-Europeanism is regarded in media circles as evidence of respectability, the same clots who got it all so wrong last time are allowed to trot out the same discredited arguments. Will we never learn?

See article

http://uk.reuters.com/article/topNew...51B1KQ20090212

Hear, hear

Must there be a referendum in the UK if the government decides to give up the pound? anybody knows?

Yes, a country usually holds a referendum on the issue. Look at what happened with Ireland.

Now, I'm an American married to a Brit, but what do I know. But I'll still voice my opinion. If the Brits sold off Man U, do you really think they'll stand up to the gov't when it comes time to sell off the pound?

Hi all,

Below is a piece I posted a few weeks ago on another website regarding the possibility of the UK joining the eurozone. Some of it may be of a degree of interest to this thread...

There has a little speculation in recent months regarding the UK joining the euro with a lock-in rate of 1.1 or 1.2 EURGBP. I find it difficult to see how such a rate would be a happy marriage for the existing members of the eurozone, as their manufacturers and service providers would find it prohibitively difficult to compete, with UK companies enjoying such advantageous terms. Indeed, only two weeks ago, Christine Lagarde, the French Minister of Finance, complained about sterling weakness at the point when EURGBP was trading circa 0.93.

Yes, the UK has no qualms about taking the Bank Rate to zero and using quantitative easing in attempting to unlock credit and kick-start the economy. Compared to the eurozone, the UK’s response to this crisis has been remarkably agile, a benefits of not being part of an sometimes cumbersome currency union. Through its independence, the UK will enjoy a substantially weaker currency, which will be of great benefit to the economy in helping to rebalance trade flows in the coming year.

Furthermore, the UK would be in even worse shape than it is now had it joined the euro at its inception in 1999, given that the bubble in credit and housing would have been even more inflated, seeing as policy rates have been far lower in the eurozone than the UK over the past decade.

When discussing the possibility of the UK joining the euro, one must also consider the current mood of the British people towards the EU and, more specifically, the single currency. The notion of signing up to the euro is a highly contentious and unpopular subject right now, making it political suicide for the Labour or Conservative party to advocate the euro, or even to attempt in starting a serious discussion about the possibility.

This anti-euro sentiment that exists among the UK public is likely to increase in the coming months, as the worsening recession brings, through high levels of repossessions and unemployment, the desire for economic isolationism – the cries of “British jobs for British workers”and “Buy British” will become more audible by the day. Personally, I deplore the very notion of protectionist economics, as it is ultimately a highly destructive and flawed concept over the long term.

Therefore, in my opinion, the UK choosing to join the euro within the next seven years is very unlikely. This leaves us considering the possibility of the UK being forced to join the single currency, through a run on sterling and/or an Icelandic style economic implosion. I view these as unlikely scenarios for the reasons set out below.

Firstly, the UK issues its debt in sterling, meaning, as a last resort, they can always print more cash to either repay maturing debt or inflate the current debt burden to a more manageable level. This option wasn’t available to emerging market countries that ran into trouble in recent years, namely Argentina, Russia and, more recently, Iceland – all of whom had public sector debt denominated in a foreign currency.

On more relevant points, the UK’s public sector debt levels to GDP remain lower than France or Germany, even after we account for the announced increases to borrowing in 2009, including the guarantees to the banking sector (contingent liabilities).

The UK is still the 5th biggest manufacturer in the world economy, a sector which is a far greater contributor to GDP than financial intermediation. Manufacturing will increasingly benefit from a weaker sterling, due to imports becoming more expensive and companies receiving a welcome comparative advantage over foreign competitors. The UK is far from being a one-trick pony, unlike Iceland, although the leverage on the balance sheets of consumers and banks remains a real concern, as it does in the US and many other developed countries.

So far the credit rating agencies have not come close to even hinting of a downgrade to UK sovereign debt. In fact, towards the end of January, Moody’s went so far as praising the “vitality” of the UK’s economy and went on to say that the debt rating of the UK is no weaker than that of other nations with triple-A grade. This confidence is further evidenced in the credit markets, where the spreads between gilts and bunds are well within long-term averages. Moreover, there exists a far greater divergence between comparable yields on bunds and debt issued by governments of Ireland, Spain, Italy, Portugal and Greece, all of whom, like the UK, are deficit countries.

In conclusion, I view the chances of sterling joining the eurozone in the next seven years, either through choice or by necessity, as an unlikely proposition.