Sterling jumps on ERM stance

STERLING has jumped sharply, after Mr Gordon Brown, the chancellor, said the new British government had ruled out taking the …

STERLING has jumped sharply, after Mr Gordon Brown, the chancellor, said the new British government had ruled out taking the currency back into the European exchange rate mechanism.

The pound closed down 0.6p sterling at 93.20p in late trading.

Sterling gained almost three pfennigs against the German deutschmark following Mr Brown's ending of speculation over British reentry. In Dublin the pound closed 0.6 of a pfennig to DM2.5787.

Sterling closed at DM2.7628, 2.05 pfennigs stronger. Mr Brown's comments went a long way to gnashing last week's rampant speculation that the British was considering reentering the ERM.

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Meanwhile, Italy yesterday received a sharp warning from its EU partners that it is relying too much on one off measures to meet the Maastricht criteria.