In the survey of 35 economists taken July 21-23, the chances of Britain joining EMU by end-2006 have fallen to 13% from 25% in April. For end-2007 the probability was just 25%.
"Public opinion polls are more and more against," said James Knightley at ING Financial Markets in London. “The focus will be on whether the government delivers what it promised...to improve public services. They will look ahead to the election (due by 2006) and are unlikely to devote any significant time on euro entry."
Finance Minister Gordon Brown said in June that his five economic tests for entry had not been met. Brown will look at the tests again next year, but even if they are met, economists think the government would postpone any referendum until after the next election.
A general election is possible in 2005. But even if the British public then voted to join the euro, sterling would probably have to spend two years after that preparing for EMU entry by holding sterling around an agreed exchange rate in Europe's exchange rate mechanism, ERM-2. All this makes EMU entry before 2007 unlikely.
