I'm only partially joking there. The Euro has had large amounts of turmoil in the past three years which has involved large bailouts of some countries. The inevitable path appears to be closer alignment of fiscal policy (including taxation and public spending) which is sovereignty that the UK public is opposed to giving up. There's a strong anti-EU sentiment in the UK with a significant proportion in favour of the UK leaving the EU.
In addition, adopting the Euro would mean giving up independent monetary policy. Unilateral monetary policy across regions with disparate economic performance can be very problematic.
Consider the case of Hong Kong, which has effectively adopted the US dollar (pegged in 1983). Despite the fact the economy has been growing strongly and inflation is running around 4-5%, interest rates are near zero, as dictated by the Fed.
As a result, fixed asset prices have soared, with residential real estate rising 100% over the last five years.
Those that own assets benefit and everyone else gets screwed as asset price changes feed into cost of living without wage growth to compensate. No surprise then that HK has the most unequal income distribution in the developed world. [1]
This also works the other way. So as others have pointed out, until there is a proper fiscal union (which I certainly can't see in the foreseeable future), the decision to not adopt the Euro seems wise.
That makes sense. It was a real question I had, I have no opinion of the matter.
I guess the UK sees itself as having a more stable economy that other European Union countries, so it would benefit from having a separate currency (but the other countries would be hurt by not having a very strong country adopt the euro).
Not more stable, but historically out of phase. i.e. when Germany has done well the UK has had a down phase and vice versa.
The killer flaw in the Eurozone is not appreciating how useful different currencies are for dampening the effect of such differences. Greece is the classic example, where for them the Euro was too strong making them globally uncompetitive, leading to a nasty downward spiral, whereas Germany benefit from their exports being far more competitive than they would be if they were still using the DM.
I'm only partially joking there. The Euro has had large amounts of turmoil in the past three years which has involved large bailouts of some countries. The inevitable path appears to be closer alignment of fiscal policy (including taxation and public spending) which is sovereignty that the UK public is opposed to giving up. There's a strong anti-EU sentiment in the UK with a significant proportion in favour of the UK leaving the EU.