Sterling collapse poses threat to 7,500 food industry jobs
Published 10/08/2016 | 02:30
More than 7,000 jobs and €700m in food exports are in the firing line due to the collapse of sterling against the euro.
The dire warning was issued by employer group Ibec as sterling's exchange rate against both the euro and dollar took another tumble last week.
The latest fall came on the back of the Bank of England's decision to cut interest rates from 0.5pc to 0.25pc - a record low and the first cut since 2009.
Bank of England governor Mark Carney also signalled that rates could go lower if the British economy worsened.
The move prompted a further drop in sterling against the euro, with the euro now trading at close to 85p, up from 72p over the last 12 months - a 15pc change.
Ibec's director of policy, Fergal O'Brien, warned that the continued appreciation of the euro against sterling will have devastating consequences for the Irish agri-food exporters as it makes Irish produce more expensive for British buyers. "The analysis of the historical exchange rate and agri-food export relationship shows that a 1pc weakness in sterling results in a 0.7pc drop in Irish exports to the UK," Mr O'Brien said.
"If sterling was to weaken further towards the £0.90 mark, this would translate to losses of over €700m in food exports and about 7,500 Irish jobs in that sector alone," he warned.
While the euro-sterling exchange rate was in the region of 85p back in 2010, Mr O'Brien said the latest collapse was different.