CHAMBER UPDATE: Brexit Referendum-The Result
Following on from this morning’s announcement that the UK has voted to leave the European Union 51.9% to 48.1%, please see, Brexit Referendum- The Result for an update on what this result now means both for the UK public and Irish business.
- In the immediate term, we can expect some degree of currency fluctuation in Sterling and possibly other currencies, so businesses with exposure to Sterling should consider how they will manage this.
- There may also be some market volatility with knock-on consequences for investments and pensions and it is unclear how long this period of uncertainty will last.
- It is important to highlight that there will be no immediate impact as negotiations for a UK exit from the European Union are likely to take a considerable amount of time. For example, pending the outcome of any negotiations there will be no introduction of tariffs and there will be no immediate introduction of a hard border between the Republic of Ireland and Northern Ireland. Free movement of people should also not be impacted in the immediate aftermath.
- The UK is Ireland’s largest single trading partner in Europe and ranks second to the USA in terms of global export markets. However, the share of Irish exports (goods and services) to the UK has fallen from 55% to 17% over the last 40 years. Similarly, the dependence on the UK as a source of goods imports has fallen dramatically, with the share decreasing from 50% to 26% since 1975. The EU bloc (excluding the UK) is the largest trading partner of the Ireland, and accounts for more than twice the volume of Irish merchandise exports to the USA. Irish exporters should look to building on already strong links with US and EU markets in the months and years to come to account for any disruption to trade links with the United Kingdom.