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According to a report carried out by the Revenue Commissioners and the Central Statistics Office.

Unsurprisingly, the favourable exchange rate was cited as the primary reason for heading north to shop. However, changes to VAT rates, which widened the price gap between North and South, was not viewed as a significant factor by shoppers.

The report says: "Changes in VAT rates have widened the price differentials but they remain small compared to the size of the change in the exchange rate. Cross-Border shopping is likely to remain an issue as long as sterling remains weak."

In 2007, the amount spent by shoppers over the border is thought to have been in the region of E140m to E210m. If the sterling remains weak through the current year, the value of cross-border shopping is forecast to hit E700m through the whole of 2009. The study was carried out to determine the extent to which cross-border shopping has contributed to the decline in retail sales in the Republic.