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Disadvantages for the UK if they join the single currency After Black Wednesday when the UK was forced to leave the exchange rate mechanism system, the pound started to appreciate in the long run around 1996. It appreciated 23% against what is now the euro. This happened due to the UK outperforming countries of the ERM and becoming substantially more competitive. Additionally, inters rates were high in the UK and a lot of 'hot money' flowed into the UK economy. UK manufactures learnt to deal with the strong pound and the volumes of exports were increasing once again, improving the current account deficit. The government were able to use certain polices to get into this possible economic situation and the Bank of England was able to adjust interest rates in order to control inflation. However once the UK join the Euro both exchange rate policy and many other policies and interest...

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