page_title: United Kingdom and the euro
section_title: Convergences and criteria
hierarchical_section_title: United Kingdom and the euro / History / Convergences and criteria
caption_attribution_description: English: Gordon Brown, Prime Minister of the United Kingdom, at the session Three Crucial Questions for the Prime Minister of the United Kingdom, Gordon Brown at the Annual Meeting 2008 of the World Economic Forum in Davos, Switzerland, on 25 January 2008.
context_page_description: The United Kingdom did not seek to adopt the euro as its official currency for the duration of its membership of the European Union, and secured an opt-out at the euro's creation via the Maastricht Treaty in 1992: Bank of England was only a member of the European System of Central Banks.
  Opinion polls in the UK showed that the majority of British people were against adopting the euro, and in a June 2016 referendum the UK voted to withdraw from the EU which eliminated the chance of any future adoption. On 31 January 2020 at 23:00 GMT the UK left the EU.
  Despite never being a member of the eurozone, the currency is used in the UK's Cypriot territories and as a secondary currency in Gibraltar; furthermore, London is home to the majority of the euro's clearing houses.
context_section_description: The United Kingdom entered the European Exchange Rate Mechanism (ERM), a prerequisite for adopting the euro, in October 1990. The UK spent over £6 billion trying to keep its currency, the pound sterling, within the narrow limits prescribed by ERM, but was forced to exit the programme within two years after the pound sterling came under major pressure from currency speculators. The ensuing crash of 16 September 1992 was subsequently dubbed "Black Wednesday." During the negotiations of the Maastricht Treaty of 1992, the UK secured an opt-out from adopting the euro.
  The government of former Prime Minister Tony Blair declared that "five economic tests" must be passed before the government could recommend the UK joining the euro and promised to hold a referendum on membership if those five economic tests were met. Her Majesty's Treasury first assessed five economic tests in October 1997, when it was decided that the UK economy was neither sufficiently converged with that of the rest of the EU, nor sufficiently flexible, to justify a recommendation of membership at that time. Another assessment was published on 9 June 2003 by Gordon Brown, when he was Chancellor of the Exchequer. Though maintaining the government's positive view on the euro, the report opposed membership because four out of the five tests were not passed. However, the 2003 document also noted the considerable progress of the UK towards satisfying the five tests since 1997, and the desirability of making policy decisions to adapt the UK economy to better satisfy the tests in future. It cited considerable long-term benefits to be gained from eventual, prudently conducted Economic and Monetary Union (EMU) membership.
  The UK would also have to meet the EU's economic convergence criteria (Maastricht criteria) before being allowed to adopt the euro; which at that time the UK's annual government deficit to the gross domestic product (GDP) was above the defined threshold. The government committed itself to a triple-approval procedure before joining the eurozone, involving approval by the Cabinet, Parliament, and the electorate in a referendum.
caption: Gordon Brown set out the 'five economic tests' that must be met before the UK would adopt the euro
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