When will the U.K. convert to the Euro as an official currency?
"I read an account of why the U.K. didn't end up with the euro as its currency in David M. Smick's great book The World Is Curved: Hidden Dangers to the Global Economy. Chapter 6 of the book is titled ""Nothing Stays the Same: The 1992 Sterling Crisis.""  Here's a very brief excerpt; emphasis mine: [...] As this story shows, such   blindness to the realities of a   changing world can be very dangerous.   In this case, the result was the   brutal collapse of the British pound,   which explains why the British people still use their own currency, the   pound or sterling, and not the euro.   The events that unfolded in the autumn   of 1992 were totally unforeseen, yet   they reshaped the European monetary   world and represent a phenomenon that   continues to impact global economies. [...] Smick's account of the events around 1992 runs about 28 pages.  Here's my version, in a nutshell: At the time, Britain was part of the European Exchange Rate Mechanism, or ERM. The belief in Europe was that by uniting currencies under a common mechanism, Europe could gain influence in international financial policy largely dominated by the United States.  The ERM was a precursor to monetary union.  The Maastricht Treaty would eventually create the European Union and the euro. Britain joined the ERM later than other nations, in 1990, and after some controversy. Being part of the ERM required member nations to agree to expand and contract their currencies only within certain agreed upon limits called currency bands. Due to the way this had been structured, Germany's strong position placed it at the top of the system. At some point in 1992, Germany had raised interest rates to curb future inflation.  However, Britain wanted Germany to cut rates – Britain was not in as enviable a position, economically speaking, and its currency was under pressure.  The currency band system would put Britain in a tighter spot with Germany raising rates. Enter George Soros, the Hungarian billionaire, a.k.a. ""the man who broke the Bank of England.""  Soros took a huge short position against the Sterling. He believed the Sterling was overvalued relative to the German deutsche mark, and Britain would be forced to devalue its currency and realign with respect to the ERM.  Other traders followed and also sold the Sterling short. With much pressure on the currency, the Bank of England had to buy up Sterling in order to maintain its agreement under the ERM.  Of course, they needed to borrow other currencies to do this.  Soon the BoE was in over its head defending the Sterling, realizing the exchange rate it needed to maintain under the ERM simply wasn't sustainable. Britain was forced to withdraw from the ERM on Black Wednesday, September 16th, 1992. And so, Britain does not use the euro today – and any talk of doing so is politically controversial.  Therefore I wouldn't bet on Britain adopting the euro any time soon – too many of the players are still in politics and remember 1992 well.  I think if Britain adopting the euro is ever to happen, it will be when the memory of 1992 has faded away. BTW, George Soros made off with more than US$1 billion.  Soros is a very smart guy." Not anytime soon, I suspect, but not necessarily for financial reasons. I found this interesting, including the link to the five tests, but I think that this topic is only partially judged through financial eyes, there's a lot of political issues around this with national identity/immigration issues already in the spot light as well as political aspirations. If there will be a call in the near future to join the Euro, how would that reflect on the financial industry in the UK from a PR perspective? and on the political leadership and how it managed the financial crisis?  I believe that it is in the interest of all the people in the high positions to show the country getting back on track rather than making ground shaking moves. But what do I know....:-) When economies are strong, it is particularly alluring to have a single currency as it makes trade and tourism simpler and helps reduce costs. The problem comes when individual member economies get into trouble. Because the Eurozone is a loose grouping of nations, there is no direct equivalent of the US Federal government to coordinate a response, there is instead an odd mixture of National and Central government that makes it harder to get a unified approach to the economy (OK, it's maybe not so different to the US in reality).  This lack of flexibility means that some of the key levers of international finance are compromised, for example a weak economy can't float its currency to improve exports. Similarly individual country's interest rates can't be adjusted to balance spending. I suspect the main reason though is political and based on concepts of sovereignty and national pride. The UK does the majority of its trade with the Eurozone, so the pros would possibly outweigh the cons, but the UK as a whole (and some of our papers in particular) have always regarded Europe with suspicion. Most Brits only speak English and find France and Germany a strange and obtuse place. The (almost) common language makes it easier to relate to the US and Canada than our near neighbours. It seems the perception amongst the political establishment is that any attempt to join the Euro is political suicide, while that is the case it is unlikely to happen. Purely from a personal perspective, I'd welcome the Euro except it means a lot of the products I routinely buy would become a lot more expensive if price is 'harmonised'. For an example compare the price of the iPod Touch in the UK (£209.99) to France(€299). The French pay £262 at the current exchange rate, which is close to 25% more. Ouch. See also my question about Canada adopting the US Dollar I can't see it happening because most of the population seems to be against it, even if their reasoning on the whole is wrong. Theoretically, people are against the Euro here as a result of national pride. If it's the best thing to do for the good of the country then national pride shouldn't be taken into account. It'd be perverse in the sense that you'd be stopping your country from progressing because you love it. That doesn't add up. Personally, I don't think it's possible for an entire continent to have a single currency. There's too many different countries and cultures involved. For it to work you'd have to have centralised fiscal policy and this makes no sense at all for a continent. What works here might not work in France or Germany. What works in Greece might not work here. etc, etc. The make up of each country's economies is different. A lot of smaller (and/or weaker) countries did not have much choice when Germany and France decided to rename the German Mark as the Euro, as most of their trade was already in Marks.  It was even common for their population to have their savings in Marks.   So the question was. Do we wish to have to use the Euro   with or without a seat on the board? It was a no brainer for them at the time... The UK has a lot of trade with the USA and other countries outside of the Euro zone, so we are unlikely to have to join the Euro.    So in the end it comes down to this point -  if the British voters trust a UK government they elected more or less than an EEC government mostly elected by people in the other EEC countries. I don’t think the UK will be joining the Euro anytime soon, but everything can (and will) change with the passage of time.  (After all the USA used to be part of the pound trading zone and please can you pay us all the back dated tax you stop paying after a little tea party!) Update: Given what has just happen to Grease and Spain and the Conservative Party has the most seats in the UK parliament, I don’t think the UK will not be joining the Euro for the next 5 years at least In many countries in Europe the prices shot through the roof, so it is not all positive. Also the switching country gives out lot of monetary control that is not welcomed by many.  I think that UK is not going to change to euro for a long long time.
"This is the best tl;dr I could make, [original](http://www.reuters.com/article/us-britain-economy/uk-stuck-in-slow-growth-gear-boe-on-course-to-raise-rates-idUSKBN1CF1F1) reduced by 86%. (I'm a bot) ***** &gt; LONDON - Britain&amp;#039;s Brexit-bound economy remains stuck in a low gear but is probably not weak enough to dissuade the Bank of England from raising interest rates next month, economic data showed.  &gt; The BoE said last month that most of its policymakers thought it was likely that they would need to raise rates for the first time in a decade in the coming months.  &gt; The BoE believes last year&amp;#039;s Brexit vote will create more inflation pressure by dampening business investment and slowing migration to Britain.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/75iaad/uk_stuck_in_slow_growth_gear_boe_on_course_to/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~225637 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **Britain**^#1 **month**^#2 **economy**^#3 **data**^#4 **year**^#5" I'm travelling to the US soon and will transfer to a US $ account from either an € account or £ account. My dad recommends transferring € because it's strong at the moment compared to previously. The £ is weak compared to what it was, but still stronger than €. Which is the best option at the moment? "This is the best tl;dr I could make, [original](http://www.reuters.com/article/uk-britain-sterling-idUSKBN1AR0M9) reduced by 75%. (I'm a bot) ***** &gt; LONDON - Sterling fell to a fresh 10-month low against the euro on Friday as investors added bearish bets against the British currency on concerns the economy may be struggling to gain momentum.  &gt; Sterling fell 0.2 percent to 90.92 pence against the euro, its lowest level since October 2016.  &gt; It has fallen for two consecutive weeks and has weakened nearly 9 percent against the euro since early May. Morgan Stanley strategists are predicting euro parity with the pound in the first quarter of 2018.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6thf3f/british_pound_further_down/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~190040 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **against**^#1 **since**^#2 **Sterling**^#3 **week**^#4 **euro**^#5" If you are really worried your best bet is to move all your cash from Sterling into a foreign currency that you think will be resilient should Brexit occur. I would avoid the Euro! You could look at the US Dollar perhaps, make sure you are aware of the charges for moving the money over and back again, as you will at some stage probably want to get back into Sterling once it settles down, if it does indeed fall. Based on my experience on the stock markets (I am not a currency trader) I would expect the pound to fall fairly sharply on a vote for Brexit and the Euro to do the same.  Both would probably rebound quite quickly too as even if there is a Brexit vote it doesn't mean the UK Government will honour the outcome or take the steps quickly. ** I AM NOT A FINANCIAL ADVISOR AND HAVE NO QUALIFICATIONS AS SUCH ** The interpretation is correct. The Reuters may give you the London 4PM rates if you query after the close for the day. The close rate is treated as the rate.  http://uk.reuters.com/business/currencies/quote?srcAmt=1&srcCurr=GBP&destAmt=&destCurr=USD The London 4PM rate may be obtained from Bank of England at the link below; http://www.bankofengland.co.uk/mfsd/iadb/index.asp?Travel=NIxSTxTIx&levels=1&XNotes=Y&XNotes2=Y&Nodes=X3790X3791X3873X33940&SectionRequired=I&HideNums=-1&ExtraInfo=false&A3836XBMX3790X3791.x=4&A3836XBMX3790X3791.y=3 Or any other Bank that provides such data I personally don't agree with a currency union. I'd rather follow Ireland's example when they gained independence and created the Irish Pound and peg it to Sterling, which they did for over 70 years before transitioning to the Euro.   There isn't any debt to reject or default on.The UK treasury has already assured the debt market that it's 100% responsible for it.  Scotland has no responsibility for taking on any debt, but might/will in response to negotiations and in return for something.   Debt markets will be far more receptive of a country which has 0 government debt. We're not talking South Sudan or a tin pot south american country, we're talking about a mature northern european democratic state.   I should also note, that oil is a bonus, but not a required export. With oil, Scotland has higher revenue per person than the entire UK,  but if it disappeared tomorrow, we're only slightly below the UK average.  [Institute for financial studies.](http://www.ifs.org.uk/publications/6881) Either way you'll be converting to US Dollars somewhere along the line. You are seeking something that is very redundant 22 June 2016 would have been the time to do this. Nobody on here can tell you what GBP/EUR will do in the next few months and years now. Brexit is going to happen, which implies lower UK growth and consequently a lower path for GBP interest rates, but this is all already priced in.  If you believe the UK economy will underperform current forecasts and/or the euro-area economy will outperform current forecasts, that may imply there's scope for further GBP depreciation. If you believe the probability of a further political shock from a 'no deal' Brexit is materially higher than the market thinks, the same is true. But the opposite of these things could happen also.  I would worry less about playing the currency markets as a retail investor and more about what currency your outgoings are denominated in. You live in Spain. Do you have significant GBP expenses or liabilities, or do you expect to have them in the future? If not, why are you taking currency risk by holding GBP balances? Whereas if you do - e.g. if you plan to move (back?) to the UK in the near future - then it makes more sense. A Yen is like a penny.  Buy a chocolate bar 100¥ or £1.00.  Should the UK get rid of pennies and only price things to the pound? GBP is widely traded currency and it is definitely possible to send GBP internationally with out any conversion. Of late banks are trying to maximize the FX and if they see a Euro country the sending bank assumes the beneficiary account is in Euro and converts to get FX spread than letting the beneficiary bank decide. Keep complaining to your bank and then the sending bank will put your account in exception and not convert next payments There is (at least) one service that allows you to convert USD, GBP and EUR at the interbank spot rate, and make purchases using a prepaid MasterCard in many more currencies (also at the interbank rate). They currently don't charge any fees (as of September 2015). You could use your US prepaid card to fund your account with Revolut and then spend them in your local currency (HRK?) without fees (you can check the current USD/HRK rate with their currency calculator); you can also withdraw to non-EUR SEPA-enabled bank accounts, but then your bank would charge you for the necessary currency conversion (both by fees and their exchange rate). If you have a bank account in EUR, you could alternatively convert your USD balance to EUR and then withdraw that to your EUR bank account. If your US prepaid card has a corresponding bank account which can be used for ACH direct debit or domestic wire transfers (ask the issuer if you are unsure), TransferWise or a similar service might also be an option; they allow you to fund a transaction using one of those methods and then credit an account in "Currently, there is simply no reason to do so. It's not a problem. It is no more of a problem or effort to denote ""5,000"" than it is to denote ""50.00"". But if there were a reason to do so, it wouldn't be all that difficult. Of course there would be some minor complications because some people (mostly old people presumably) would take time getting used to it, but nothing that would stop a nation from doing so. In Iceland, this has happened on several occasions in the past and while Iceland is indeed a very small economy, it shouldn't be that difficult at all for a larger one. A country would need a grace period while the old currency is still valid, new editions of already circulating cash would need to be produced, and a coordinated time would need to be set, at which point financial institutions change their balances. Of course it would take some planning and coordination, but nothing close to for example unifying two or more currencies into one, like the did with the euro. The biggest side-effect there was an inflation shot when the currencies got changed in each country, but this can be done even with giant economies like Germany and France. Cutting off two zeros would be a cakewalk in comparison. But in case of currencies like the Japanese Yen, there is simply no reason to take off 2 zeros yet. Northern-Americans may find it strange that the numbers are so high, but that's merely a matter of what you're used to. There is no added complication in paying 5.000 vs. 50 at a restaurant, it merely takes more space on a computer screen and bill, and that's not a real problem. Besides, most of the time, even in N-America, the cents are listed as well, and that doesn't seem to be enough of a problem for people to concern themselves with. It's only when you get into hyper-inflation when the shear space required for denoting prices becomes a problem, that economies have a real reason to cut off zeros." At any instant, three currencies will have exchange rates so if I know the rate between A and B, and B to C, the A to C rate is easily calculated. You need X pounds, so at that moment, you are subject to the exchange rate right then. It's not a deal or bargain, although it may look better in hindsight if the currencies move after some time has passed. But if a currency is going to depreciate, and you have the foresight to know such things, you'd already be wealthy and not visiting here. You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time. "You are right, if by ""a lot of time"" you mean a lot of occasions lasting a few milliseconds each. This is one of the oldest arbitrages in the book, and there's plenty of people constantly on the lookout for such situations, hence they are rare and don't last very long. Most of the time the relationship is satisfied to within the accuracy set by the bid-ask spread. What you write as an equality should actually be a set of inequalities.  Continuing with your example, suppose 1 GBP ~ 2 USD, where the market price to buy GBP (the offer) is $2.01 and to sell GBP (the bid) is $1.99.  Suppose further that 1 USD ~ 2 EUR, and the market price to buy USD is EUR2.01 and to sell USD is EUR1.99.  Then converting your GBP to EUR in this way requires selling for USD (receive $1.99), then sell the USD for EUR (receive EUR3.9601).  Going the other way, converting EUR to GBP, it will cost you EUR4.0401 to buy 1 GBP.  Hence, so long as the posted prices for direct conversion are within these bounds, there is no arbitrage."