The pound should enter EMU at existing central parities in order to defend the economy against a predicted long-term fall in sterling, according to Mr Philip Halpin, chief operating officer at National Irish Bank. Speaking to the Irish Association of Corporate Treasurers yesterday, Mr Halpin said this would "copperfasten a competitive advantage for our trading sector in a market where we remain on the periphery".

Predicting a British recession, Mr Halpin said that high interest rates and overvalued currency had squeezed the lifeblood out of German industry in the early 1990s and would do the same in Britain. This would be a prime factor in driving the rate of sterling down, he said. By the middle of next year, the punt/sterling rate would be expected to be around 93p.

Mr Halpin also predicted that Irish interest rates would drop sharply over the next four months. He expected Irish three-month money to fall to 5.6 per cent in one month's time and he predicted further decreases of up to 0.4 of a percentage point each month until the announcement of countries participating in the euro in May when the rate is expected to be as low as 4.3 per cent.