What happens to our pound?

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The Independent Online
What is the euro?

It will be the currency of the 11 countries taking part in the first wave of monetary union. It will replace national currencies.

When will it be launched?

On 1 January 1999, when exchange rates will be irreversibly locked to the euro.

Will the euro be in circulation from next year?

Euro notes and coins do not come into circulation until January 2002. From next year, wholesale financial markets will begin trading the euro.

When will local European currencies begin to disappear?

Currencies of the 11 countries will go at the end of June 2002.

What does this mean for European interest rates?

From 1 January, the independent European Central Bank will set a single interest rate for all 11 first-wave participants.

When will the UK join?

It is not certain whether it will - the Government has a list of economic criteria which must first be satisfied. All three major parties promise a referendum.

What does the euro mean for UK interest rates?

In the short term, very little. The Bank of England will continue to set the UK rates. If the UK does join, the rates will gradually adjust to European levels.

Does this mean UK rates will go down if we join the euro? Currently, European interest rates are less than half UK interest rates, and many believe joining the euro will mean cutting British rates. But this situation could be reversed.

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