Euro-sterling parity ‘on the horizon’

EURO-sterling parity is becoming increasingly more likely by the start of next year. That would put pressure on Irish exporters and the tourism industry, say currency experts.

They predict that sterling, which is almost a fifth lower than in August 2007, is likely to weaken further over the coming months. BNP Paribas said the pound may reach parity with the euro in the first quarter of next year while Citigroup forecast it would exceed parity.

The Bank of England said recently that sterling’s long-run value may have been fundamentally undermined by the financial crisis. A weaker pound pushes up the price of goods imported into Britain and makes it more expensive for Britons travelling elsewhere in Europe on holiday.