Dr. Mark Cassidy:

It is five hours overall. Approximately two thirds of Irish exports to non-EU countries use the landbridge. It is, therefore, an extremely important issue in terms of these additional costs.

The Border region is clearly most affected. The issue of the backstop came up and I am happy to take any additional questions on that. For me, the backstop is much more important from a political perspective than from an economic perspective. The Republic of Ireland's trade with Northern Ireland is important. Maybe 1.5% of our overall exports go to Northern Ireland and the proportion of our imports that from Northern Ireland is probably similar. The less disruptive the Border controls, the less will be the effects on North-South trade. The types of arrangements that materialise will be important but the political dimension of the backstop in the context of the Good Friday Agreement dwarfs the economic effects. As I highlighted, however, the economic effects are also important.

The currency issue came up in a couple of questions and it is very important. Sterling is now approximately 16% weaker than it was just before the referendum. This has created a much more difficult situation for exporters in terms of competitiveness of exporting into the UK market. Irish exports to the UK have held up quite well since the referendum. In the event of a no-deal Brexit, the risk of significant further weakening of sterling arises. Added to what has already occurred, this could create a very difficult situation for Irish exporters, particularly in agrifood sectors. We do not forecast what might happen in the event of a no-deal Brexit but it is quite clear that in such an event there would be further weakening of sterling, whereas if a deal could be agreed, the markets would probably be pleasantly surprised and there would probably be some strengthening of sterling against the euro. The outcome very much depends on what Brexit scenario materialises.

We have already seen a slowing in the property market. To back up what Senator Joe O'Reilly is seeing, we have seen strong increases in property prices in recent years. The rate of increase has slowed. That is an economy-wide phenomenon which reflects the fact that more supply is coming on stream and, probably, the Central Bank's measures and also that affordability pressures generally become more acute as prices rise. In terms of the outlook for property prices, Brexit may have some minor effects. If there is an economic slowdown overall, that could have a negative effect on property prices through its impact on demand. On the other hand, the increase in demand for accommodation from workers in new financial services may put some upward pressure on housing in Dublin. Overall, I believe the evolution or path of house prices will be most affected by more supply coming on stream in the coming years. We expect to see this increase in supply continue.

The Central Bank reviews its mortgage rules every year. Our latest review was in November last and its main finding was that these rules are critically important for financial stability reasons in order to protect borrowers and lenders from excessive lending, over-indebtedness and the types of problems that emerged during the early 2000s. If one has a limited supply of housing and the response is to provide more and more credit, the credit starts chasing up prices. It does not create more houses as the availability of houses does not increase. The mortgage rules are, therefore, are an important check in the market to prevent a return to the past. However, in the event of a no-deal Brexit, we have provided our recommendations on appropriate budgetary policy, fiscal policy and so on. Certainly, in the event of a no-deal Brexit, one would see some room for discretionary spending, for example, towards most affected targeted areas. Maybe that is the most appropriate, direct and transparent way of dealing with that type of issue.

I will make one final point before Ms Fitzgerald responds. I could not agree more with Senator O'Reilly's comment that we hope that a no-deal Brexit will be avoided. There is a great deal of uncertainty. A question was asked about uncertainty and companies holding off on investment decisions. We believe that is the case and there is considerable uncertainty, particularly among small and medium-size enterprises.

It is probably not worth their while to make long-term investment decisions until they know exactly what form of Brexit materialises. Likewise, in terms of preparedness, it is easy to say that SMEs should be prepared for all eventualities, but it is costly for those with lower profits to prepare for an eventuality that may not materialise. The degree of preparedness among small enterprises undoubtedly is not complete. There has been a holding off on investment. If a favourable deal were to go ahead before 31 October, there may be some economic bounce as a result.