Irish companies who import products from Britain have had to increase their own prices in turn, because of sterling's strength, although not all of the increase is being passed on, a new survey has found.

On average, importers have increased the price to consumers by 8 per cent per annum.

The survey, carried out by AIB Corporate & Commercial Treasury found that there was a high level of confidence among businesses.

It also found that Irish companies could tolerate a level of 82p84p against sterling, without any fall off in demand for their products.

The survey said sterling has gained 9 per cent on the pound in the last six months and 20p over the past 20 months. It said not all of the increase was being passed on in the form of higher prices to consumers for several reasons. These included UK suppliers part subsidising the sterling gain, a lagging of price increases and the fact that some importers already have forward cover in place.

The survey found that 68 per cent of respondents had experienced more than a 5 per cent increase in their imports, while 40 per cent had experienced import prices of more than 10 per cent. The average was 8 per cent. According to Mr Donal Forde, head of AIB Corporate and Commercial Treasury, continued sterling gains would be reflected in increased pricing to the end user.

The survey questioned 110 companies in five sectors. Half felt that sterling's strength was having a negative effective on UK suppliers.

Importers indicated that they would be happy with a rate of 89p against sterling. "This would indicate that business can be competitive at an exchange rate of 89p," according to the survey.

"It would appear that a rate of 80p is perceived as the threshold rate where importers would expect to see a fall-off in demand for their product, regardless of the Celtic Tiger activity," the survey noted.

The survey also examined the amount of dependency which firms in Ireland have on sterling. Almost half (44 per cent) said their businesses would be either extremely or very sensitive to a continuation of the sterling trend over the coming 12 months.

A further 28 per cent said they were fairly sensitive to sterling's continued strength.