Nobody ever really expected the British pound to sink to the level of the euro (for years a euro has been worth around 70p) but it's reached parity now and is still falling. Which will be devastating for British holidaymakers to Europe (but they can always go somewhere else of course, like home) and for the tens of thousands of Brits who have fled chilly Britain for France, Greece, Portugal and Spain. In theory the low pound should help British manufacturers, as its makes goods from Britain cheaper in our biggest export market the European Union, but with continental Europe in recession export markets have dried up. So is there a bright side? Well UK exports should improve as consumers across Europe get used to the recession over the course of 2009 and the UK's tourist industry will get a much-needed boost (including an influx of short-haul shoppers from Europe, manna from heaven for upmarket retailers). And we may even be able to re-open a reasoned debate on the benefits of joining the euro, after finally realising that the celebrated GBP is a pretty weedy currency in world terms against the euro, the dollar and the Japanese yen. The downside is that it will slow further cuts in UK interest rates but they've really only got half a point or so to go before it all gets silly. Nobody is going to offer mortgages or loans at two per cent so it's becoming rather academic. And the hot money that's been driving the pound down will start the look elsewhere as the speculators, our old friends the hedge funds in all likelihood, realise that the UK economy isn't quite the basket case they think, despite the best efforts of the politicians and bankers. So it's tough if you holiday in Spain or live abroad and find your GBP savings worth less. But the collapsing pound might actually get us out of recession rather more quickly.