A brief reprieve. That was all sterling seemed to get after UK inflation figures showing a stronger-than-expected annual rise of 0.6 per cent in July.

The story from the figures is one that may repeat itself in the months ahead – a weaker currency is pushing up import prices and this is feeding through to inflation. Forecasters now expect UK inflation to be running at 2.5 per cent in the first half of next year.

Sterling edged higher immediately after the figures, and has held on to some gains against a weak US dollar. But against the euro, sterling was again trading at over 87p this afternoon, approaching the 90p level identified by Ibec as a real crisis point for Irish exporters.

Support

The key point to note is that stronger inflation figures might have been expected to give the currency some support. This is because rising prices may make it more difficult for the Bank of England to keep ramping up its efforts to stimulate the UK economy next year, for fear of sending the inflation rate too far over the 2 per cent guideline level.

The continued weakness in sterling is thus a sign of continued nervousness about the post-Brexit outlook for the UK economy. The mood was not helped by weekend reports that the Brexit negotiations may drag on longer than expected – thus prolonging uncertainty.

Reverses

Unless this reverses, it is going to be one of the Irish economic and political stories of the autumn, with pressure set to increase on the Government to act to save jobs.

In the last week sterling has lost more than 4 per cent against the euro, and it is off over 12 per cent since the referendum. The question now for exporters is how low can it go?