The results of our component cost survey surprised us. We expected Britain to do fairly well, but we did not expect UK costs to be the third lowest undercut only by Portugal and Spain. This is good news for every British manufacturer, and it should be a relief to many companies that have been worrying about how competitive they will look once euro pricing becomes widespread. The study was carried out when sterling was slightly higher than it is now so in relative terms, UK costs could be even lower. Once the smoke screen of variable currencies is swept away, British industry may be revealed as offering high-value engineering from a country with a formidable science, technology and research base, but at Spanish prices, not German ones. The advantage will be short-lived, as other nations cut costs and effect the kind of efficiency gains already seen in the UK. British firms must start muscling in on business across the channel right now.