UK won’t drag Ireland into a recession – Varadkar

Ireland’s deputy premier Leo Varadkar said the Irish economy was decoupled from the UK’s a long time ago.

Tanaiste Leo Varadkar has said he doesn’t expect the UK will drag Ireland into recession. (Niall Carson/PA) (PA Wire)

The UK won’t drag Ireland into a recession, the Irish deputy premier has said.

Chancellor Jeremy Hunt confirmed the UK is in recession as he outlined his autumn statement on Thursday.

Tanaiste Leo Varadkar said it was “very bad news”, describing the UK as one of Ireland’s biggest trading partners as well as nearest neighbour.

“Anything that happens in their economy will affect ours,” he said.

Mr Varadkar who is set to return as Irish premier (Taoiseach) next month, blamed not just the war in Ukraine, but also Brexit and some recent policy decisions by the UK government.

“Those are the factors … but I don’t believe they’re dragging us into recession,” he said.

“Our economy decoupled from theirs a long time ago … it’s still our expectation that next year our economy will grow slightly and employment will continue to grow as well.”

Current Taoiseach Micheal Martin said analysis and forecasts suggest Ireland will not go into recession next year.

“That said, we’re very much aware of storm clouds gathering across Europe, and across the United Kingdom,” he said.

“Britain is a very important market to us, we export a lot to Britain, we import a lot as well and therefore, we want UK to do well. If the UK does well, many of our companies will do well.”

Mr Martin said Ireland managed the economy well during the coronavirus pandemic which gave it resources and allows it to put money aside to deal with issues that arise.

“But it is a very, very uncertain world because of the war, the war has cast a shadow over all of Europe – it’s fair to say, I think, that Europe is probably more disadvantaged by the war than any other region.”

“We wish the UK well, we want them to get through this particular period.”