Brexit – Initial Impact

As the UK embarks on leaving the EU today 24th June 2016, the risk and uncertainty for business will be long-lasting.

However, the negotiation of a potential exit in itself will take many years and it will be difficult to quantify the impact on Ireland until the UK decides on its possible exit scenarios.

For example, the UK may adapt the Norwegian Model which comprises of the following:

• The UK joins the European Economic Area .
• Maintains access to the single market.
• Still makes a substantial contribution to the EU budget .
• Must comply with EU standards and regulations over which it will have little influence.

Economic Impacts

At the date of this article, we consider the most important economic risks of Brexit to be in the following areas:

Exchange Rate

• The immediate effect of the exit vote is evident in the Sterling exchange rate and we expect it to become more volatile. This would make our exports to the UK more expensive, although our imports would be cheaper.

People and mobility

• The exit from the EU is likely to lead to restrictions on immigration to the UK (and vice versa). EU citizens may need to obtain permission to work in the UK under rules similar to the current immigration requirements for non-EU citizens. This could have a significant impact on Irish citizens.