By ANDREW GRICE and DIANE COYLE
LONDON - Britain could join the European single currency "in the near future" because the economy has already converged with those of the 11 countries in the eurozone, says a report by House of Commons officials.
The independent analysis, obtained by the Independent, comes as pressure grows on the Government to make a firm statement of intent to join the euro, in order to bring down the over-valued pound.
This week the Bank of England's monetary policy committee opted to leave interest rates unchanged at 6 per cent, against a background of mixed evidence on the economy.
The decision came as a relief to businesses and unions, which have been lobbying for action to bring down the painfully strong exchange rate. Many want the bank to cut borrowing costs, but City analysts believe more increases are likely.
A rate increase yesterday would have been widely seen as a damning verdict on last month's Budget, which was unpopular with business organisations for not removing all threat of further rises.
Digby Jones, director-general of the Confederation of British Industry, said Chancellor Gordon Brown should be doing more to help manufacturers. Toyota has warned it could reconsider its investments in Britain because of sterling's strength against the euro.
The Commons report, compiled by the House of Commons Library, says the inflation rate has moved closer to the eurozone average, although interest rates in Britain are still about 2.5 points higher.
However, the report admits the exchange rate remains the issue to be settled before possible entry.
Money: Britain edges closer to the euro
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