Letter: Out of step with EU
Friday 15 January 1999
Even on the quite inadequate criteria of inflation rates and interest rates we have not converged.
Of course, inflation rates are falling towards EU levels but they are still higher. And, of course, UK interest rates have fallen, but at 6 per cent they are still well above Euroland's and any precipitate fall towards 3 per cent would surely trigger inflation in the labour and housing markets.
But these criteria do not get to the heart of real cyclical convergence.
On any measure of capacity utilisation (whether it is, for example, unemployment for pressures in the labour market or a more general "output gap" measure) Britain shows no signs of moving into line with the core European economies.
Our business cycle is stubbornly transatlantic rather than continental.
There remain fundamental structural differences (for example, more divergent trade patterns and a greater sensitivity to changes in short-term interest rates) which - even if we were ever to get into "sync" with core Europe - would effectively torpedo any hopes of sustained cyclical convergence.
Head of Policy Unit
Institute of Directors
film Sex scene trailer sees a shirtless Jamie Dornan turn up the heat
Maisie Williams single-handedly rises to the challengeTV
Arts & Ents blogs
- 1 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Rashida Jones speaks out against male-centric porn saying 'women should have sex and feel good about it'
Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
Game of Thrones really doesn't want Danny Dyer - EastEnders star rejected three times
Game of Thrones season 5 trailer: The first full-length look is here
Sia apologises for 'Elastic Heart' music video that sees Shia LaBeouf wrestle 12-year-old Maddie Ziegler
25 years of Disney: How Darth Vader, Iron Man, Elsa and Pixar's geniuses helped the company conquer the world (again)
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
King Abdullah dead: We can't afford not to hold Saudi Arabia's royals to account