Tuesday, October 4, 2016

Like the Autumn Rain, Brexit Still Falls

It's raining in buckets. Here in beautiful West Cork, the rain gauge is tipping 5 inches - in the last 24 hours alone. It's supposed to clear up this afternoon, or so says the Met office. Mind you, I rarely believe what the Met Office says. Not when it comes to West Cork: the only way to know the weather is to put your head out the window in the morning.

The same can be said of news on Brexit. The only way to know what's going to happen is by, ah, waiting to see what will happen. But maybe you've not heard about this major global disruption. If not, let me remind you.

If you've been living in a cave in southwest Australia you might not have heard, but the United Kingdom has voted to leave the European Union. And that decision has caused ructions across the world.

So on this day of constant, continual wet gloom, I've good news and bad news for those of you interested in the possibilities of living and working in Ireland. The good news is: the uncertainty regarding the timing of England's exit from the EU has at last been clarified. Yesterday, UK Prime Minister Theresa May said the government would trigger Article 50, the EU clause required to start the exit process, by the end of May of next year. So finally the uncertainty is over.

The bad news: within minutes of the Prime Minister's announcement the Pound Sterling had plunged to a three year low against the European euro. It's not doing well against the US dollar, either. So while the uncertainty regarding the exit's timing has been resolved, the uncertainty regarding the ripple effect that exit will have on global economies is still uncertain. But indications are bad.

A few posts ago I reported the impact the UK's exit is having on Ireland. Unfortunately, that negative impact would appear to be getting worse. A range of Irish companies - everything from smaller craft beer manufacturers to food companies who rely on British exports for critical turnover - are lowering expectations or downsizing a bit or closing shop. Despite this bad news, Brexit has not managed to significantly curtail Irish economic growth. Not yet, anyway. Various pundits are calling for continued expansion of over 5 percent in 2017 for this economy.

But what is frightening is: the implementation of Brexit will take approximately 2 years. No one, not even the so-called experts, are exactly sure what will happen. A continual weakening of the Pound Sterling will surely put additional pressure on Irish exports. Should the UK's economy fall of a cliff and run into recession (as some economists warn), many Irish exporters will be hit hard. And this, of course, will result in job losses.

So to those thinking of moving to Ireland: if I were you I'd push the 'move' button sooner rather than later. Do your research. Plan your move. But don't wait until the Irish economy gets pummelled by the possible hurricane that could result from Brexit.

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