One reason for that has been further recent evidence that Britain's manufacturing sector has learnt to cope with a powerful pound. Figures released earlier in the week showed manufacturing output in November rising at its fastest rate for more than four years. UK exports rose 7.1 per cent in the three months to November, compared with the previous year. But businesses and unions said that Britain's long-term competitiveness could suffer. Some businesses have even gone so far as to threaten shifting manufacturing facilities out of the UK into eastern Europe, although others say the UK's position in or out of the euro will make no difference to their plans.
Analysts see no immediate prospect of any respite from the strength of the pound.
Barclays Capital, for example, expects sterling to rise to DM3.50, making one euro worth 56p, over the next year. Copyright the Financial Times Limited 2000.