A TOP business leader highlighted major problems for exporters when he spoke in Manchester. Mr Adair Turner, Director General of the Confederation of British Industry, told the CBI's North West annual dinner that the soaring value of the pound must be a key factor in the Bank of England's next interest rate decision. But in the longer-term he thought UK membership of the European Monetary Union offered the only realistic prospect of freeing much of the export sector from dramatic exchange rate swings.

He said: "The Monetary Policy Committee must be aware just how severe the problems are for the export sector.

"What we need now from the Bank of England is a signal that interest rates are at their peak - that could help put the pound on to a downward path to a more realistic level."

He went on: "Turning to the longer-term, the danger of an oscillating pound establishes a key argument for the UK's eventual membership of EMU.

"That is one reason why the majority of CBI members, although well aware of the risks involved, have come down in principle in favour of EMU under the right conditions."

He added: "While in an ideal world EMU would go ahead with more complete fiscal convergence and greater progress towards more flexible labour markets, Britain will eventually have to choose between entering or staying out of the EMU which actually exists.

"Entering may be the only way to free exporters from the turmoil of a pound oscillating against the currency of our major trading partners."

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