The Brexit-related crash in sterling has led to a sharp increase in Irish imports from the UK, according to Irish foreign-exchange specialist Fexco.
An analysis of more than 2,000 currency transactions by the group showed Irish businesses imported 16 per cent more British goods and services in September than they did in the same month last year.
The “import splurge” was most noticeable in the transport sector, with car and other vehicle purchases from the UK up 33 per cent.
Imports in the construction, energy and utilities sector were up 20 per cent on their September 2015 levels, with wholesale imports of British goods climbing by 5 per cent.
Personal customers
Consumers were also shown to be cashing in on a weaker sterling, with Fexco recording an uptick in personal customers sending money to the UK.
Transfers from Ireland to the UK were 73 per cent higher in euro terms than at the same time last year, Fexco said.
Since the June referendum, sterling has shed about 15 per cent of its value against the euro, with the single currency trading at about 89.3 pence on Thursday, though it has been as high as 94 pence.
The biggest victims of the sterling crisis are likely to be Irish exporters, with the value of their products becoming relatively more expensive to British consumers.
Equally, a significant bout of inflation in the UK could erode purchasing power there, lowering overall demand.
Fexco’s report noted that total Irish exports fell by 11 per cent in July, the first full month after the Brexit referendum, albeit the September export figures rebounded.
Flash crash
"It may have rallied a touch this week, but the pound is still worth 15 per cent less against the euro than it was on the eve of the Brexit vote," said David Lamb, Fexco's head of dealing.
“The sterling flash crash in early October – in which it lost a tenth of its value in just minutes – shows just how fragile the pound is,” Mr Lamb said.
"As a result, British demand for Irish goods and services is shrinking, in what the Irish Business and Employers Confederation has described as a full-blown currency crisis.
“But while the tumbling pound is causing mayhem for Irish exporters struggling to sell to the UK, our research also reveals the costs closer to home,” he added.
“With Ireland splurging on UK imports, there’s a growing danger that Irish firms will lose out in the domestic market to a flood of cheaper British competitors.”
