Speculation about Britain's entry into Economic and Monetary Union has sent sterling sharply lower on the foreign exchange markets. British Minister Mr Peter Mandelson fuelled the speculation by suggesting in a television interview that Britain had not ruled out entering EMU in the first phase in 1999.

But he said that economic conditions and convergence would drive the timetable. E. His comments provided a focus for much of the day in European markets, weakening sterling against the major currencies.

In Dublin the pound ended the day marginally better against sterling at just over 90p, having edged higher in earlier trading. The Irish currency also regained ground against the deutschmark, closing unchanged at DM2.5625, having initially turned weaker against the German currency. The pound was also largely unchanged against the dollar, trading at $1.4538.

Analysts believe that continuing speculation over Britain's stance on EMU will firmly keep a lid on sterling.