Single European Currency Tracker, July 2002

Our latest MORI poll suggests that public opinion remains clearly against EMU entry. The balance of opinion against EMU entry has increased slightly since May and is similar to the average of Labour's first term in government (1997-01).

The Treasury's latest Changeover Plan suggests that the government is still keeping open the option of a referendum next year on EMU entry. But, in practice, we doubt that public opinion will shift enough to allow the government to risk a vote. In particular, it seems unlikely that peoples' experience of using the euro on summer holidays will produce a significant shift of public opinion in favour of EMU entry. If anything, support for EMU entry might suffer as people hear at first hand about price hikes -- which have been especially marked among recreation services.

With economic growth picking up, the chance of EMU entry does not seem high enough to support the UK short end if equities manage to stabilise.

Technical details

Latest polling conducted between 11 and 16 July 2002. Sample size 2,159 people for latest, similar for earlier polls.

Sources: MORI Financial Services and Schroder Salomon Smith Barney

UK -- Balance of Opinion Over EMU Entry, 1991-July 2002