Although outside the single- currency bloc, from today companies here will be able to account, issue shares and pay their taxes in euros. A small number may even offer to pay their employees partly in euros.
Most surveys show that British businesses favour entry to the single currency by athree to one. There is a small but vociferous band, led by figures such as the Dixons chairman Sir Stanley Kalms, who are implacably opposed, more for political and philosophical reasons than because they fear it will be bad for business.
But the majority of companies - both large and small - sense that it would be in their business interests for Britain to be in. For that reason, they are likely to embrace the euro, meaning that Britain, to some extent, will become a de facto member of the single currency.
In any event, not being a member of monetary union does not mean British business can ignore its arrival or escape its impact. The European Union, with its 320 million customers, is our biggest single trading partner, accounting for some 55 per cent of all UK trade in goods.
From a practical standpoint, businesses will be affected in two main ways. First they will have to get used to being paid in euros - which means shouldering the exchange rate risk as sterling's value against the new currency bobs around.
Second, British companies are unlikely to be immune from the increased harmonisation of prices across Europe that the single currency produces.
According to the latest survey of readiness for the single currency by the consultants KPMG, two-thirds of companies price variably across Europe and the gap between the highest and lowest prices is as high as 57 per cent. "This means that pressure on prices might result in a significant revenue squeeze for many companies," says Michael Littlechild, a partner with KPMG Consulting.
The survey also shows that two-thirds of businesses across Europe expect prices to fall with the introduction of the euro. Only 30 per cent think it will mean higher profits in the short term but in the longer term 77 per cent think the impact will be positive.
Douglas Godden, head of economic policy at the Confederation of British Industry, said: "There will be a process of convergence as prices become more transparent. The euro will also mean more trade across borders and that means more competition, which will tend to lead to price convergence."Reuse content