Should the UK ditch the pound and adopt the Euro ? Poll Discussion

marchhair

I haven't read all the posts, there's just too many, but it seems no one has picked up on the fact that Sterling is a 'large' currency compared to most - i.e. 1 pound is traditionally worth more than 1 Euro. One reason it was so easy for retailers to hike up prices during the changeover to the Euro is that 'intuitively', things look cheaper if the price is expressed in a larger currency, so six eggs might have cost 2.10 Deutsche Mark and then they cost 1.15 Euro, even though that's more expensive if the proposed conversion was 2:1, it still kind of seems cheaper, and people are more likely to put up with it. The reverse effect would apply to Britain - everything would seem more expensive, even if the price was adjusted fairly, which would increase psychological pressure downwards on prices.

Moreover, any opportunistic price rises at the point of changing to a new currency are likely to be balanced out and absorbed by more fundamental economic factors like competion and supply and demand in the long run anyway.

And lastly, they would also be offset by the massive financial advantage gained by Bristish citizens by being able to buy goods and services from abroad without being ripped off by banks via the exchange rate every time. Britain's geographical and financial separateness from the continent seems to contribute to things being more expensive here (I'm avoiding the hackneyed phrase' rip-off Britain' here), in my personal experience as someone who visits Germany often, more things are more expensive here rather than cheaper, although there are a few exceptions. Not having the currency barrier would mean that British retailers would have to compete more with those across the border. Electronics, CDs etc are all slightly cheaper in Germany I think. Someone mentioned them being more expensive in an Eastern European country (Slovakia?) - could this be down to limited supplies there?