I know he’s never liked it (it’s well-known Tony Blair wanted the UK to join but that Gordon Brown came up with a way to scupper his plans by setting up some tests that the Treasury could claim were not met), but something interesting has happened since he became prime minister.
If we look at the pound/euro exchange rate (see the graph on the left which I made based on data from this website), the euro kept falling for the first three years after it was introduced. This was the time when it didn’t exists physically, and during this time any of the eurozone countries could theoretically have called a halt to the process and insisted on reverting to their old currency.
However, shortly after the notes and coins were introduced, the euro started rising against the pound. Presumably, many former sceptics could now see that the euro was now here to stay, and that there was no easy way to go back for any of the participating countries.
Then for some time, more or less from the beginning of 2003 to the middle of last year, the pound was very stable against the euro, normally staying between 66p and 70p to the euro.
However, as soon as Gordon Brown became prime minister, something weird happened: The pound started dropping like a stone. I haven’t included the dollar in the graph, but what seems to have happened is that the pound has stopped mirroring the euro and attached itself to the falling dollar instead.
I guess many people might not fully have realised this yet, but when they come back from their summer holidays to the continent and study their bills, I think we’re going to see a reaction.