An interim management statement from Bank of Ireland suggests that Irish risks from a Brexit are no abstraction. British customers account for 40 per cent of BoI's loan book, so the institution is heavily exposed to conditions in the UK economy.

The referendum does not take place until June, but uncertainty over the outcome and other forces have already sent sterling on something of a wild ride. Although the UK currency dropped 7 per cent against the euro in the first three months of the year, it recovered ground in recent days to reach a six-week high against the euro.

Sterling’s decline in the first quarter accounted for some €3 billion of a €4 billion drop in BoI loan volumes to €81 billion, which came even as new lending rose. This is unavoidable for the bank given its geographic spread.

With the totality of weekly trade between Ireland and Britain now worth some €1.2 billion, it’s the exact same for numerous other Irish firms.

Currency fluctuations are inevitable in international business of this nature, but sterling’s twists and turns this year reflect market sentiment vis-à-vis the likelihood of Britain repudiating the EU.

It’s as well to say here that this is not the only factor. Another is anxiety about Britain’s particularly large – and widening – current account deficit.

Still, the perceived popularity of Boris Johnson was enough to drive the currency down when he declared for the Leave campaign, the assumption being that many undecided voters would slavishly follow the outgoing London mayor.

Sterling’s more recent recovery reflects sentiment that voters may opt in the end to stay in the EU. This follows a robust anti-Brexit intervention by US president Barack Obama and a report by the UK treasury which forecast major economic losses if the country leaves.

The sentiment driving currency markets could prove wholly unreliable but that is not the point. More relevant is that sterling’s volatility has a bearing on finances of all firms with appreciable operations in Britain.

If voters there decide to stay in the EU, markets will duly move on to another preoccupation. If they decide to leave, however, the general assumption is that sterling would be laid low.

Parity

Like other assessments, a report by the Department of the Taoiseach suggests a vote for Brexit could weaken sterling by 10-15 per cent, moving the currency closer to parity with the euro in the aftermath of the referendum.

This is on top of potential for equity market turmoil and the prospect of further investment delays as big firms await clarity over Brexit terms.

“Uncertainty is the enemy of investment,” says a senior Dublin official.

On a longer horizon, huge questions arise over the outlook for trade flows, the Border, energy markets and foreign direct investment.

All of that, necessarily, is in the realm of speculation. However, sterling’s decline in February provides a kind of foretaste of what might well be in store after a vote to leave the EU when the conditions under which the Brexit actually happened would still be unclear.

Downside

In its new Stability Programme Update report, the Department of Finance ranked the referendum as a principal downside risk to its core forecast of 4.9 per cent GDP growth this year and 3.9 per cent growth for 2017.

More to the point, a “sensitivity analysis” by the department suggests that a sustained five percentage point depreciation of sterling’s value against the euro could reduce the overall level of Ireland’s GDP by about 1 percentage point by 2018-2019. This, in turn, would weaken the public finances.

The analysis is narrow, focused as it is on a single currency trend, but the implication is clear enough. Well and good in the Irish setting if the Remain camp gains traction, yet the opposite is also true.

Despite sterling’s impact on BoI loan volumes, the bank said it continues to trade “in line with expectations”. In addition, BoI’s annual meeting on Thursday heard it was “well positioned” to deal with the fallout from Brexit.

Eight weeks from polling day, however, the net point is that the campaign itself is having an impact on trading conditions. It’s not too much of a stretch to imagine a read-through to other firms from the BoI example. In politics, however, they seem to talk of nothing else but water.