Exchange rate analysts are predicting that the value of the euro against Sterling could fluctuate between £0.75 and parity while the UK sorts out its Brexit affairs with the rest of the European Union.
Meanwhile, economists are saying that Irish exporting businesses hit genuinely difficulty once the Euro appreciates above a value of £0.85p. And, to put this in perspective, the Euro is currently worth £0.88p.
The accelerated fall in the value of Sterling against the euro followed last weekend’s confirmation by British Prime Minister Theresa May that she will begin the process of initiating the UK’s exit from the EU in the early months of 2017.
As a consequence, Sterling’s weakness has gradually picked up throughout the past two days with the GBP/EUR pairing hitting a new 52 week low. This is equivalent to an almost 3 and a half year low.
Fears of a ‘hard Brexit’ forced the issue of the UK’s relationship with Ireland high up the agenda for this week’s Irish Cabinet meeting in Dublin.
Subsequently, Minister for Social Protection Leo Varadkar announced that each government department will draw its own Brexit priority action list over the coming weeks.
Meanwhile, IBEC is confirming that the weak Sterling will have a negative impact on Irish exporters in the second half of this year and into 2017.
According to the organisation’s CEO Danny McCoy, the most pressing concern for many businesses is the rapid fall in the value of Sterling.
Exporters are feeling an intense strain and jobs are at risk
“While businesses are moving quickly to manage severe competitive pressures, an urgent, targeted national response is also required.
“Government must ensure that business does not face any regulatory, labour cost or tax increases as a result of budgetary policy,”he said.
IBEC Director of Policy Fergal O’Brien believes that the exporting industries most affected by the Sterling fall are typically jobs intensive and deeply embedded in local economies.
This will include a significant number of Ireland’s largest agri-food businesses.