Tuesday 22 October 2019

Lenihan attacks UK over slide in sterling

Brendan Keenan

FINANCE Minister Brian Lenihan has accused Britain of a "competitive devaluation" of sterling and said it is an issue for all 16 governments in the eurozone.

Mr Lenihan looks set to spark a diplomatic war of words after he suggested that the British government was not meeting its communal obligations as a member of the EU, even though the UK is not a member of the euro.

"It is a question for all of us in the EU as to the extent to which a competitive devaluation can be used as any kind of a weapon," he said.

"The fall in sterling is causing us immense difficulties."

Sterling has fallen by a third from its peak values against the euro as the Bank of England cut rates and indicated it would be prepared to countenance zero rates and the deliberate creation of money.

"They have in effect produced a devaluation of the pound through expansion of the money supply. That has put us under immense pressure," Mr Lenihan said.

The Finance Minister queried whether Britain's decision not to join the euro should allow it this kind of freedom in its exchange rate.

Exports

The small firms arm of the employers' body IBEC says 70pc of small companies who export do so into the UK market, which accounts for one third of all small business exports, and estimates that around 60,000 jobs in small companies are dependent on UK trade links.

The small firms lobby group ISME claimed 95,000 Irish jobs were at risk from sterling's fall, as companies exporting to the UK or competing with UK imports cut back on employment and investment.

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