Sterling slides as reality bites - Brexit battle lines drawn

THE phoney war around Brexit is over and an entirely different kind of engagement has begun. The consequences have been immediate. They have also shown how delicately balanced our economic relationship with our nearest neighbour and main trading partner actually is.

Sterling fell by a greater margin than any time since March 2009, falling at least 1.2% against its 16 major peers. Sterling’s slide was provoked, in part at least, by the decision by London Mayor Boris Johnston to defy his party leader and argue for Britain to leave the EU. Johnston’s naked and unabashed ambition to succeed Cameron may have been a decisive factor which, in time, may be seen as a domestic strategy rather than a principled position on Europe. If Britain votes to stay in the EU, his decision may, in time, be seen as the high water mark of his influence, but the downward turning point in a career he hoped might might have been at least stellar.

Sterling’s fall, which is expected to continue until the result of the June 23 in-out referendum is known, makes life more difficult for Irish exporters, and sounds a warning that the economic forecasts used to make election manifesto promises can be no more than speculative. They suggest too that the next Government, however it is cobbled together, may be facing very hard choices about cutting expenditure rather than delivering the largesse promised to seduce voters before Friday’s polling day.