Irish consumers ‘subsidising’ British firms over slump in sterling

The Consumers’ Association of Ireland has accused big British retailers and suppliers of short-changing householders in the Republic for failing to pass on the enormous benefits of the strong euro against sterling.

There “is no doubt” that consumers in the Republic are again being viewed as “price subsidisers” for big UK retailers after the Brexit slump in the value of sterling, the association’s policy and council adviser Dermott Jewell told the Irish Examiner.

His comments came as new CSO figures showed consumer prices fell only slightly, by 0.3%, since October 2015. That suggested some but not all of the huge rise in the value of the euro has been passed on in lower prices.

The euro has climbed over 14% against sterling since the shock vote of the UK to quit the EU in June, and has soared by almost 20% since the start of the year.

Such an enormous rise for a major currency in less than 11 months is an unprecedented event, and implies that the prices of many goods bought in the Republic should fall sharply.

A large part of the household budget is spent on food and other goods which wholesalers, retailers and suppliers source from across the Irish Sea.

The CSO figures do show that items such as furniture, carpets and floor coverings have dropped sharply since October 2015, while car prices have also fallen.

A spokeswoman for industry group Retail Excellence, said many retailers would have bought existing merchandise well before the euro had surged against sterling.