Unions and industry cheer move but critics call it wasting money

The British reaction to propping up the ailing euro was predictably divided between the pro- and anti-single currency camps, with the latter accusing the central banks of letting political considerations influence their financial judgement.

The British reaction to propping up the ailing euro was predictably divided between the pro- and anti-single currency camps, with the latter accusing the central banks of letting political considerations influence their financial judgement.

Nick Herbert, chief executive of the anti-euro Business for Sterling group, said: "When the euro was launched we were told that it would be a currency to rival the dollar. It's now requiring intervention on a massive scale to prop it up.

"This may bring short-term relief to exporters, but it won't address the fundamental reason of why the euro has been weak, which is the huge flow of investment out of euroland.

"We are also concerned about the suggestion that the intervention has been launched for political reasons - it appears to be a move ahead of the Danish referendum [on the euro]."

The Labour backbencher Austin Mitchell, a prominent opponent of the euro, said central banks were wrong to intervene.

"They are wasting their money. It's like trying to put a plug in the bottom of a sinking ship, when the water is pouring in from all directions."

The Grimsby MP added: "It's ludicrous for us to be wasting our money to this purpose. The euro is fundamentally flawed. It won't go up until the American economy either slows or stops - until then, investment is going to go to America. Any attempt to stop the natural decline in the euro is going to fail."

But both sides of industry welcomed the move which they hoped would have a positive effect on companies. Sir Ken Jackson, general secretary of the pro-euro Amalgamated Engineering and Electrical Union, said: "This is a highly significant and well-timed intervention.The involvement of the Fed [eral Reserve] is especially important and I am confident this will prove to be a successful move."

A spokesman for the British Chambers of Commerce said: "The concerted intervention has raised the chances of boosting the euro, whose persistent weakness has damaged UK competitiveness."