Ryanair boss Michael O’Leary has described the UK’s tax-cutting and energy price freeze plan as “nuts” while warning it had the potential to bankrupt the UK economy.
Speaking at a press conference in Dublin to mark Ryanair’s 35 years in business, the outspoken airline chief said: “You can’t have an energy guarantee for two years that’s completely uncosted.”
“I think it could bankrupt the UK economy in the next two years,” he said, likening the UK’s move to Ireland’s infamous 2008 bank guarantee, which later forced the State into an international bailout.
“We have been there with the bank guarantee and we can’t go back there again,” Mr O’Leary said.
The UK’s government’s new economic strategy has sent sterling crashing and UK borrowing costs up at an alarming rate.
Speaking at the same event, Tánaiste Leo Varadkar referred to the UK’s economic plans backfiring while commenting on Ireland’s budget published on Tuesday.
He said it was unclear what the impact of the UK’s plan or its contracting economic outlook would have on the Irish economy, but noted officials here typically monitored the economic performance of big trading partners like the UK.
He warned that interest rates were not just rising for people, “they are rising for governments too, and we wanted to make sure that the budget stayed within certain parameters”.
“And I think that is the right approach. We see a different approach in different parts of the world and how that has backfired,” Mr Varadkar said.
The comments come on a brutal few days for the UK government and an unprecedented intervention by the International Monetary Fund (IMF), which overnight called on UK chancellor Kwasi Kwarteng to reassess the strategy, piling more pressure on the London government, which has been in power for less than a month.
The Washington-based fund openly criticised the plan for its massive tax cuts, warning that the measures were likely to fuel the cost-of-living crisis while increasing inequality.
Mr Kwarteng unveiled the country’s biggest tax package in 50 years last week in a bid to kick-start the UK’s flagging economy. But the £45 billion (€49.9 billion) tax package combined with a plan to freeze energy prices for a period of two years has sparked fears that UK government borrowing could surge along with interest rates.
On Wednesday morning, sterling fell by 0.7 per cent to $1.06 after the IMF raised its concerns. It comes after the currency hit a record low of around $1.03 on Monday.
The Bank of England said on Wednesday it will launch a temporary UK government bond-buying programme as an emergency move to stave off a “material risk to UK financial stability”.