---- by Victoria Main ----
LONDON (AFX) - The comments on the value of sterling in the March meeting minutes of the Bank of England's Monetary Policy Committee reflect its own stance more than the view of the markets, according to economists. In its minutes released this morning, the MPC said market participants may now believe that if sterling were to join the euro zone, it would not necessarily be at a lower rate against the single currency than the current level. The nine-member committee cited a survey of longer-term expectations for sterling, conducted by Consensus Economics and published in February, which showed that the market now expects only a modest fall in the effective exchange rate over the next five years. The MPC suggested that the reason for the market's view that the current value of sterling might be broadly sustainable could be that it has "finally come to the view that sterling would continue to be strong given that it had been around the current level for over five years". Market participants may also now consider "it less likely that if sterling were to enter EMU then it would be at a lower rate against the euro", the committee ventured. However, JP Morgan economist Danny Gabay was dismissive of the MPC's interpretation of the survey findings. "The MPC tends to tie themselves up so much about the value of sterling. The reality is that it could fall," he said. Investec economist David Page said the committee was looking to the survey to vindicate its own stance on the exchange rate. Page noted the MPC's fears that a sharp fall in sterling would trigger inflationary pressure. "As far as the market is concerned, sterling is very strong and is likely to fall by the end of the year, although perhaps not for long," he said. Barclays Capital economist George Buckley said the MPC has consistently underestimated the value of sterling in its forecasts. "It is a notoriously difficult currency to forecast. It has been stronger for longer than most people had forecast. But most people do think it has to come down against the euro. We're looking for a euro/stg rate of 0.67," Buckley said. At 12.07 pm, the euro traded at 0.6189 stg.