Pressure eases on Irish firms as Brexit risk recedes

Sterling rose for the sixth day in a row yesterday — relieving pressure on many Irish firms who rely on exporting into Britain — as bookies hiked the chances of the Britain voting to stay in the EU after US President Barack Obama warned about the economic consequences of Britain leaving.

Paddy Power said the probability of the UK staying in had surged to 73% yesterday, up from 69% on Thursday, the highest level for the ‘in’ side since the campaign got under way in earnest in recent weeks.

A Paddy Power spokesman cited missteps by London mayor Boris Johnson — the leading political proponent for Britain to leave the EU — to explain the increased chances of the UK rejecting a Brexit.

Sterling yesterday rose to almost 78p against the euro.

The euro is nonetheless still significantly lower than the rate of 69p hit last November, which had helped Irish exporters to sell into Britain.

A weak euro against sterling helps boost the price competitiveness of exporters in the Republic selling into Britain and the North.

Philip O’Sullivan, chief economist at Investec Ireland, said it predicts sterling will rise to 73p by the end of September, on the basis that it believes the UK will vote to stay in the EU in the referendum on June 23.

There will be a “tail wind for Irish exporters”, said Mr O’Sullivan.

Polls suggest those favouring the UK remaining in the EU had a stronger lead. The probability of Britain voting to leave dropped to 20%, according to a poll released on Thursday by the Number Cruncher Politics Referendum Forecast.

Mr Obama had warned of the economic effects that a Brexit would cause.


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