Professor Philip Lane:

There is a potential disruption effect versus when it all settles down post Brexit with regard to where it is going to be. We are drawing strong consensus across many agencies on the view that if we take a ten or 20 year horizon, this change is very regrettable. In the end, however, it is a loss that will be absorbed by the general improvement in the economy.

The greater concern for us is disruption if it turns out that the Brexit negotiations end up badly. Right now, there is considerable market confidence that a reasonable negotiation will happen, that there will be a reasonably soft Brexit, that there will not be massive disruption to trade and so on. In the context of a soft Brexit, the world is prepared for that.

The risk factor is if it turns out that no deal is concluded or if it is a deal with serious trade restrictions. In that case the way this will affect us depends on how it will affect the UK. The question is whether the UK is going to suffer a severe slowdown because of a bad outcome. If the UK suffers a slowdown, it is bad news for us. However, much else is going on in the Irish economy. We usually think about this in terms of the 30% rule. If the UK slows down by one percentage point, then 30% of that will pass on to us. It is not one for one. We are not so integrated with the UK that it is a one-for-one relationship. It is negative for us but it does not overwhelm the domestic economy or our interaction with the USA or the rest of Europe.