British exit from the EU ‘could raise cost of Irish exports 30%’

Britain’s potential exit from the EU would likely spell disaster for Irish exporters by sending the cost of their goods soaring 30% higher than they were in January.

UK voters go to the polls on June 23 in a decision to quit or to remain in the EU with the fallout of a Brexit likely to be significant on this side of the Irish Sea.

Business group Ibec has warned of the “immediate risk” of the sterling/euro exchange rate moving to parity and “heaping pressure” on Irish businesses should the UK leave.

“A UK exit would send Ireland, Britain, and Europe into uncharted and treacherous waters,” said Ibec chief executive Danny McCoy.

“The value of sterling has already fallen significantly. A vote to leave would prompt a further significant depreciation heaping pressure on businesses trading with the UK. This is in addition to the countless other risks that would arise during and after the period of a negotiated exit.”

Polls in the UK predict a tight race, with the average of the six most recent polls showing 51% of voters in favour of staying in the EU as against 49% backing the leave campaign.

The uncertainty has already made life harder for Irish companies selling to the UK, with the euro firming against sterling since the turn of the year.

Fears of a Brexit have pushed the sterling/euro exchange rate from £0.70 in December to £0.79 now; making Irish exports almost 10% more expensive than they were a few months ago.

The prospect of weaker sterling in the run-up to the Brexit referendum will mean slower export growth next year for indigenous manufacturers, Ibec warned.