Irish businesses warned to 'prepare for the worst' as pound starts to slide
Irish businesses have been warned to "prepare for the worst" after the UK formally triggered its exit from the European Union.
A weaker pound is now the key short term danger to the economy here. The Small Firms Association warned of currency volatility, export barriers and price hikes, as the UK formally triggered exit talks with the EU.
A survey of its members found currency swings, higher export costs and rising prices as the key dangers.
The euro closed around 86 pence yesterday, but analysts say the outlook is for further sterling weakness.
Alan McQuaid, chief economist at Merrion Capital, said the pound could return to levels last seen in October when it sunk to 90p against the euro, a level that precipitated a crisis in the mushroom sector.
Cantor Fitzgerald's David Donnelly also sees sterling weakening to the 90p level.
Ireland's economic exposure to the UK's exit from the EU was also underlined in new data that showed the country is more dependent on the UK for exports than any other EU state.
Latest Eurostat data show that 13pc of Irish exports go to the UK annually. Holland and Cyprus are also exposed at 9pc.
Meanwhile the Association of Chartered Certified Accountants has said that Irish SMEs will be the biggest losers as a result of Brexit if action is not taken by the Government to safeguard the sector.
Many were already struggling because of the loss of value in sterling, adding that such businesses would not have the resources to deal with any new customs charges.
"Small businesses are facing growing economic challenges with the triggering of Article 50 and in particular companies that have between 10 and 250 employees are most exposed," said Liz Hughes at the ACCA.