What does parity of Pound with the Euro mean?

The pound's relentless slide towards parity with the euro picked up pace after it plunged to another record low against the single European currency. Sterling has lost 13% of its value against the euro in December alone as it sinks to yet more historic lows since the currency was introduced in 1999.  For those who have retired in France with their English pension, life is getting more and more tight, imagine loosing 30 % of the value of your money in just 3 months.  Electricity, water, council tax and all other expenses are not loosing 30 % of the bill.  Remember when we use to sail to France with the ferry from the UK, at the reception you could read, enjoy the parity between the English pound and 10 French franc for easy shopping.  At that time of the switch I remember the difficulties I calculating how much I was spending in Euro. I was using the double listing price in French Franc and Euro in shops in France.

For me it was the only way, how much I was spending in ''real money'' for example 10 FF was one pound and used this system for so many years. When the Euro became the French currency, it was a little bit like now in the UK, the French lost 30 % of the value of their money, at the same time because of that the UK with a strong currency took the 4th place over France in comparisons of economic scale, just because of the Euro.  If you are going on holiday in Europe, yes everything is going to be more expensive, the same when you book a holiday, on the other side if you have a salary in France or an other country of the Euro zone, well shopping is getting more interesting and cheaper with a strong Euro.  So now in the future, what is the best for us, keeping the English pound or moving ahead? A survey in the UK shows 70 % of the Britons still don't want to adopt the Euro.  The credit crunch could hit the UK much harder than the other countries of the Euro zone.

At least, one thing is sure, the credit crunch is hitting our expats in the Euro zone very hard with a lost of them, especially, those who have retired to the Euro zone, and who are now considering a move back to the UK. Experts are predicting that the pound will soon hit parity with the euro and may be worth even less, given the forecast for further steep cuts in UK interest rates.

Erick Munnings