The introduction of euro notes and coins on January 1 could lead to a spending boom as consumers use their hoarded cash to buy Swiss watches, jewellery and fine wine, UBS Warburg has predicted.

The investment bank has told clients that quoted companies such as Swatch, the Swiss watchmaker, LVMH, the French drinks group, and Bulgari, the Italian jeweller, could benefit in the run-up to the changeover.

Up to E1,100bn in cash is believed to have been hoarded by consumers across Europe, mainly to avoid paying taxes.

From January 1, 300m people may have as little as two months to spend their national currencies or exchange them for euros at banks and retailers.

A UBS Warburg note published on Monday says many European consumers could decide to spend some of their "grey money", partly because the weakness of the euro has not inspired consumers' confidence in the single currency.

"It is a fair bet that [holders of grey money] will be taking a long look at spending the cash ... rather than putting it in the bank."

The spending spree is likely to be more prominent in countries such as Italy and Greece, where the "informal economy" has been estimated at about 20 per cent of GDP.

"We could see more consumption of consumer durables, particularly luxury items that may have some investment cachet," says the note by Edward Kerschner, UBS Warburg chief global strategist.

"Swiss watches, fine wine, jewellery, antiques. Perhaps even the odd Old Master will change hands at new record prices," it adds.

The investment bank believes that the construction companies such as the France's Lafarge and Saint-Gobain and Spain's Grupo Dragados could benefit as some consumers spend their cash hoards on property.

Hotels and leisure groups could see a rise in sales if the short changeover timetable prompts some "impulse buying" of holidays.

Less obvious items such as gambling and cosmetic surgery could also be targeted by consumers eager to get rid of their old currencies.