The Irish Business and Employers Confederation (Ibec) has warned that the UK pound will crash to an ‘unprecedented’ £1.10 to the euro in the event of a no-deal Brexit.
According to Ibec, a no-deal Brexit would see the pound crash in value by between 10% to 25%; at the higher end of this scale, Irish products, including agri-food produce, would be far more expensive for British people.
At this exchange rate, Ibec says that many Irish businesses “would not have sufficient margins to supply the UK market without complete price pass-through to British consumers”.
As it stands, the early part of 2019 is likely to be a period where margins will be squeezed for many Irish exporters.
However, even if a no-deal Brexit is avoided by the current withdrawal agreement being ratified, Ibec predicts that the pound will still depreciate by between 2% and 5%, leaving the currency “somewhere around” 90p against €1.
On a small positive note, Ibec says that, if a deal is reached, the pound will “settle at lower levels in the future”.
Ibec also urged the Government and the EU to work together to implement contingency measures to support businesses.
“While we note recent contingency plans published by the Irish Government and the European Commission, we urge them to work collectively to bring forward more meaningful measures to support business. Future iterations must provide much needed information on how a ‘no-deal’ scenario would be managed on the ground,” said the group.
Today, January 7, 200 members of parliament have signed a letter calling on the Prime Minister, Theresa May, to guarantee that a no-deal Brexit will not happen, so as to avoid what they claim is the economic damage it will cause.