Brexit doubts weighing on growth prospects, says economist

‘Uncertainty will be the byword for the foreseeable future,’ warns Jim Power

Friends First chief economist Jim Power: believes it is hard to see any “real” benefits for the Republic from the UK’s vote to leave the EU, aside from a potential uplift in foreign direct investment.  Photograph: Eric Luke

Friends First chief economist Jim Power: believes it is hard to see any “real” benefits for the Republic from the UK’s vote to leave the EU, aside from a potential uplift in foreign direct investment. Photograph: Eric Luke

 

There are “tentative” signs that economic growth is easing as a result of Brexit uncertainty and related currency movements, according to a new analysis from Friends First. The life assurance company says it is difficult to see any “real” economic benefits that might flow for the Republic from the UK’s vote to leave the EU, aside from a potential uplift in foreign direct investment.

“Uncertainty will be the byword for the foreseeable future,” said Friends First chief economist Jim Power.

Mr Power predicts gross domestic product growth of 4.3 per cent for this year, but warns the economy is vulnerable to external shifts such as the 24 per cent drop suffered by sterling against the euro since the Brexit vote. Mr Power is calling for Irish fiscal policy and competitiveness to be managed as prudently as possible to ensure the economy can be as “resilient” as possible in the face of such shocks.

He also argues “a supply response” is needed to address problems in the housing market, while amending the Central Bank’s borrowing rules to give more money to prospective buyers would simply “exacerbate the upward pressure on house prices”.