Irish exports to Britain down 6% as Brexit digs in

Irish exports to Britain down 6% as Brexit digs in
Irish exports to Britain down 6% as Brexit digs in

The value of Irish exports to Britain fell by 6% in July – the latest month for which figures are available – updated CSO data show.

On top of that, Irish shares most exposed to the UK fell as no-deal Brexit concerns resurfaced with UK prime minister Boris Johnson reiterating his October 31 exit target and commentators suggesting it unlikely that Britain can agree a withdrawal agreement by that date.

AIB fell by over 1%, while Bank of Ireland shed as much as 3.86%. CRH was down over 2%, Irish Ferries owner Irish Continental Group shed nearly 3% and Ryanair and Kingspan were each down well over 1%.

Heated remarks by Luxembourg prime minister Xavier Bettel showed that the gap between the British and EU positions on Brexit remained far apart.

Mr Bettel lashed out right after talks with Mr Johnson, saying his British counterpart had failed to propose serious alternatives to unlock a Brexit deal before the October 31 divorce date and was seeking to blame the bloc for the “nightmare”.

Mr Bettel was standing alone at a podium that had been prepared for comments by both leaders, but Mr Johnson left immediately after the meeting amid a loud anti-Brexit protest just outside Mr Bettel’s office.

According to the CSO, the overall seasonally adjusted value of Irish exports increased by 18% in July, on a year-on-year basis, to just under €13.7bn. The corresponding value figure for imports was €7.4bn, marking a 4% year-on-year rise. Those movements resulted in Ireland generating a trade surplus of nearly €6.3bn in July, up from €4.4bn in June.

However, exports to Britain in July were down 6%, year-on-year, to just over €1.1bn. Exports to Britain accounted for 8% of total exports in the month. The value of Irish exports to Britain, however, increased 5% year-on-year to €8.4bn in the first seven months of the year combined.

With the exception of oil-related stocks, which rose on the back of rising oil prices after the weekend refinery attacks in Saudi Arabia, most European sectoral indexes fell on weak Chinese economic data and wider geopolitical fears.

“Despite a strong lift for oil stocks, the larger, more liquid, higher-capitalisation indices in western Europe with the strongest global links were all weak,” City Index’s Ken Odeluga said.

“It looks like investors assess the situation as having potential to further weigh on a geopolitical landscape already beset by the slowing global economy, Brexit and trade,” he said.

The pan-European Stoxx-600 index ended down 0.6%, ending a four-day winning streak, while trade-sensitive German shares dropped 0.7%.

Meanwhile, Britain has also been warned that if it falls into recession soon, perhaps after a no-deal Brexit, it might prove to be a lengthy one because the country’s financially stretched households are unlikely to be able to lead a recovery.

Britain’s household savings rate – a measure of how much households save from their disposable income – stands close to record low levels.

Households have also been net borrowers for 10 quarters in a row, an unprecedented stretch in records dating back to the 1960s.

Their lack of financial headroom could spell trouble if a downturn hits, whether triggered by events at home or abroad.

-additional reporting Reuters

Source: Business News