Shoppers set to chase Brexit bargains after drop in sterling
CONSUMERS could be set to flock across the border to avail of cheaper goods following Britain’s decision to leave the European Union, an expert has said.
Total trade in goods and services across the Irish Sea is worth around €1.2billion every week, making the UK Ireland’s biggest trading partner.
And the collapse in the value of sterling means Irish exports will become far more expensive for the British – but also means that UK goods will be far cheaper to import.
For the Irish consumer, Britain’s decision to opt out of the EU is likely to have consequences for travel, health, cross-border shopping trips as well as online spending and even the prices on supermarket shelves.
Dr Aidan Regan, lecturer in European political economy at UCD, said the immediate effect from Brexit will be on the price of goods and services which will be affected by currency fluctuations.
Dr Regan, who is director of the Dublin European Institute, added: ‘Given that sterling has dropped and it’s cheaper now to buy products in sterling, you’re going to have people going up to Belfast to buy products. On a very basic level, why would you go to your local suit maker and pay €500 for a suit when you cross the border and get it for £200?
‘It’s a perfectly rational calculation on behalf of people if they can get something that’s 15% to 20% cheaper. In that sense Irish business will be affected, particularly along the border area.’
One example of cross-border shopping being affected is a red dress from Debenhams, pictured. Last night it was on sale on the Debenhams Irish website for €99.
However, the same dress is for sale on the British website for £42, which is now equivalent to just €51.46. There is often a slight difference between prices in Britain and Ireland, but with the sterling weakening, the disparities are now increasing.
Dr Regan said: ‘British exporters will probably do well here because it’s going to be cheaper to buy British goods.’
However, he said this doesn’t bode well for Irish exporters, adding: ‘If you’re in Manchester looking at an Irish producer which is a euro more expensive than the locally produced goods, you’re going to buy the locally produced goods.’
He also said the days of cheap holidays for Britons could soon be over, as flights and hotels could be up to 15% more expensive. Dr Regan said: ‘All those British people, English people who were buying cheaper holidays in the south of France, Spain – forget about it.’
‘People going to Belfast’