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Republic's firms are told to carry on with plans for hard Brexit

Businesses in the Republic should continue to plan for a hard Brexit, according to Ulster Bank Ireland's chief economist Simon Barry
Businesses in the Republic should continue to plan for a hard Brexit, according to Ulster Bank Ireland's chief economist Simon Barry

By Ellie Donnelly

Businesses in the Republic should continue to plan for a hard Brexit, according to Ulster Bank Ireland's chief economist Simon Barry.

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As the UK prepares to go to the polls in a general election on December 12, Mr Barry said Conservative Party leader and Prime Minister Boris Johnson is targeting a relationship between Britain and the EU that is not closely aligned.

"This is really important, if the UK wants to do its own thing you are ruling out all the options for a close natural relationship," he said.

"More political independence is what the UK wants, and if it achieves more, it's bad [for Ireland]," he told guests at a 'Business Beyond Brexit' event organised by the British Ireland Chamber of Commerce.

He added that the EU and the UK are potentially heading in the direction of a "bare bones" free trade agreement.

"It would be wrong to presume we can take our foot off the gas in terns of preparation work," he said.

In an overview of the Irish economy, Mr Barry said forecasts of an economic slowdown in the event of a hard Brexit would amount to "a huge shock" even if the country does not fall back into recession.

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Elsewhere, he said the country has almost become "desensitised" to "an impressive and remarkable transformation" of the labour market over the past seven years. "It's not just a Dublin story, all regions have benefited," Mr Barry said, adding that the labour market has driving influence on other aspects of the economy.

"Workers are getting paid more and household spending power is rising at about 6.5% per year."

However, he warned against setting expectations for the jobs market to remain as strong as it currently is. "There will be slower but more sustainable jobs growth [in the future]," he said.

Global uncertainty and Brexit has potentially played a useful role in stemming the risk of the Irish economy from overheating, Mr Barry said.

He added that the "really unhelpful conduct of economic policy by US meant that international markets had become more uncertain. Uncertainty, he said, "was the enemy of growth".

"There was now less fate in operation of global trading system," he added.

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