LONDON -- Prime Minister Tony Blair urged his nation to embrace Europe, but the financial markets concluded Friday that the government hadn't moved closer to a decision to join the European Union's common currency.
In anticipation of his speech, the pound sank to a four-month low of $1.4043 early Friday, perhaps taking a cue from the front-page headline in the Financial Times: "Blair to deliver strongest signal on euro."
After the speech, however, the market concluded there was no change in the government's noncommittal position, and the pound bounced back to $1.4126.
"There is absolutely nothing new in today's speech, which may be a bit of a relief," said Audrey Childe-Freeman, chief economist at CIBC World Markets.
The government has said it is inclined to join the single currency if and when it is in Britain's interest to do it.
Others, however, thought they heard a pro-euro message in Blair's speech to the European Research Institute in Birmingham, where he said Britain had been damaged by its "history of missed opportunities."
Those missed chances, Blair said, went all the way back to the creation of the European Coal and Steel Community in the 1950s.
"The tragedy for British politics -- for Britain -- has been that politicians of both parties have consistently failed, not just in the 1950s but on up to the present day, to appreciate the emerging reality of European integration," Blair said.
Although the euro has been the region's official currency since 1999, underpinning the value of drachmas, francs or marks, it has been kept out of the public's hands while the old national currencies continue to circulate, giving people time to adjust.
All that changes on Jan. 1, when euro notes and coins become legal tender in 12 of the 15 European Union countries -- the latest and biggest step yet in the continent's long, slow march toward unity. Only Britain, Sweden and Denmark will remain outside the euro-zone.