ISME's exporter group IREX has called for the creation of a contingency fund to support firms exporting to the UK as margins have been eroded by the strength of the pound.

IREX said that many companies had developed their UK business at a time when the exchange rate was 85p-90p against sterling, while the rate is now 104p. The lobby group described the decision to maintain the level of the pound as a political one in large part unrelated to the reality confronting indigenous industry in the UK market".

If the exchange rate is to remain at 104p the Government would have to introduce a contingency fund similar to the 1993 Market Development Fund, according to IREX.