By FWi staff
FARMING will have to cope with the strong Pound for at least the next 12 months, a leading bank warned at the Royal Show on Monday (3 July).
Brian Montgomery, senior executive of NatWest Bank, said at a recent press conference that the Euro will rise only slightly to about 65-66p in the next year.
This is just 2p above the current rate of 63-64p, and still a long way below the target of 75p needed before the UK can realistically join the Euro.
There is unlikely to be much change until the European parliament overcomes two major challenges, he said.
The first is to encourage the four remaining EU countries to join the Euro. The second is to persuade the six to eight other European countries to join the EU within the next 3 years.
“As we are at the moment, it is virtually impossible for us to join the Euro, and there hasnt been sufficient political spin to encourage people to vote in favour,” said Mr. Montgomery.
The UK economy is influenced by the USA, the dominating force in the financial world, and a slowing of the US economy, which has been predicted over the next 18 months could lead to an increase in UK interest rates, maintaining the strong Pound.
On the positive side, confidence is slowly returning to Euroland, which could see a strengthening in the Euro.
However, this has been forecast for a while and is still to materialise.
“Globally, we will remain in the current state unless the government goes to some lengths to make serious changes,” says Mr. Montgomery.
“We will start to see a very vibrant future once these few hurdles are overcome.”