Wednesday 16 October 2019

Sterling falls to two-year low as no-deal Hallowe'en spooks traders


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Donal O'Donovan and Shawn Pogatchnik

Sterling fell towards its lowest levels in more than two years yesterday amid growing alarm that the UK is heading for a crash-out Brexit on October 31.

The tremors were also felt on stock markets in London and Dublin.

Britain's mid-cap Ftse 250 share index, which includes many companies focused on the domestic UK market, fell for the third straight session as Irish ministers raised the spectre of new infrastructure to cope with trade under a no-deal Brexit.

Shares in Dublin, where the market is heavily weighted to exporters, also fell.

Amid the rising alarm, the Irish Exporters Association said worryingly few Irish companies are fully prepared for a no-deal Brexit and called on all export-focused firms to review their plans urgently.

The association said 50,000 small and medium-sized businesses had still not applied to Revenue for an Economic Operators Registration and Identification (EORI) number - the essential ID for trading with nations outside the EU.

"We are concerned that, three months after the original Brexit deadline, only very few companies in the Irish trading community are fully prepared for all outcomes," said chief executive Simon McKeever.

He added that the insufficient take-up of EORI registrations illustrated what he called "the deep gap in the number of businesses taking the minimum preparatory actions for Brexit".

Dublin Port, the linchpin for UK-Irish trade, will today seek planning permission for a €320m development, including plans to respond to changes as a result of Brexit.

However, the Institute of Directors in Ireland said business readiness was advanced.

Still, with the UK economy already worsening, and a growing risk of a Hallowe'en Brexit crisis, traders pushed the pound down half a percent against the dollar to a level not seen since April 2017.

The pound also weakened to a six-month low against the euro at 89.95 pence and is on track for a 10th consecutive week of losses against it.

Sentiment was also worsened after the head of the WTO dismissed claims by Boris Johnson, frontrunner to be UK prime minister, that if Britain crashes out of the EU without a deal, businesses will still be able to trade tariff-free with Europe.

WTO director general Roberto Azevêdo said the Gatt 24 rule that Mr Johnson claimed would apply cannot be invoked unless the parties involved have agreed on a future trade deal.

Irish Independent

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