With new British prime minister Boris Johnson making clear that the UK will leave the EU on 31 October, whether there is a deal or not, the value of sterling saw a marked drop on Monday, falling to levels similar to those seen in the aftermath of the Brexit referendum.

The lowest point for the value of sterling since then came in August 2017 when it fell to 92.6p to €1.

Since then, sterling has consistently traded in the 88p to 90p (per €1) range as negotiations on a Brexit deal continued.

On Monday, sterling lost a full penny in value, dropping to an exchange rate of 92.5p – almost on par with its weakest point two years ago.

Difference between north and south

For farmers, the consequences depend on which part of the island of Ireland they are based.

South of the border in the eurozone, it represents further bad news for an already weak market.

It is the opposite for farmers in the North, as the weaker sterling is more competitive than their agri food exports are.

The immediate winners are farmers selling milk to creameries south of the border and sheep farmers sending lambs south for processing.

CAP payments

Another angle that will benefit Northern Irish farmers is the fact that the rate of exchange for CAP payments is set in September each year.

With the payment from Brussels issued in euro and converted to sterling before it is issued to farmers, the weaker sterling is, the higher the payment will be.

Overnight, sterling recovered some of Monday’s losses, but with the EU seeing no basis for discussions and the UK government pushing ahead with its departure plans, the only question now is how low will sterling go?