PARIS: French tyre manufacture Michelin said on Tuesday it had raised prices in Britain to tread on the creation of a black market in tyres in response to a falling pound following the Brexit vote.

The company’s financial director Marc Henry said the direct impact to Michelin from Britain leaving the European Union wasn’t that large, but acknowledged that it had raised prices there to “avoid the creation of a parallel” market for its tyres.

The pound plunged following the unexpected decision last month of British voters to leave the European Union.

Sterling has shed 20 per cent from peaks hit last year against the euro, creating the potential for profit on the resale of goods in the single currency zone.

Henry said, however, Michelin was more concerned about “the impact of Brexit on global economic activity”.

So far this year Michelin has been able to boost its profitability despite a dip in revenues.

Net profit rose by 9pc to 769 million euros ($847m) in the first half of the year, with the company saying its cost savings programme accounted for 155m euros.

Published in Dawn, July 27th, 2016