Companies producing goods in the euro zone have become 14 per cent less competitive over the past year as a result of the euro's strength, the European Commission said yesterday.

US cost competitiveness grew by 9.5 per cent over the same period, while British firms became 3.1 per cent more competitive. Japanese firms upped their competitiveness by 6.9 per cent.

The Commission report notes that euro-zone competitiveness dropped by 3.5 per cent over the second quarter of this year, as the euro's real value against a basket of currencies from 12 industrialised countries rose by about 4 per cent.

In June, according to the report, the effective exchange rate of the euro stood at levels recorded around the time of its launch.

Analysts said the report was unlikely to move the European Central Bank, which cut interest rates by half a percentage point in June to a record low of 2.0 per cent. - (Additional reporting, Reuters)