Boris is departing but the threat to Irish businesses remain

Business leaders here are concerned Mr Johnson's successor will continue fight-picking with Ireland and the rest of the EU over the protocol, including implicitly threatening a trade war 

Economists also warn over forecasts that show the British economy will flirt with recession next year, potentially harming a host of Irish small firms, including agri-food exporters, who sell their goods and services across the Irish Sea.

The British economy faces enormous challenges, and fixing the costly row over the Northern Ireland Protocol still depends on who takes over from Boris Johnson, Irish business leaders and experts have warned. 

Economists also warn over forecasts that show the British economy will flirt with recession next year, potentially harming a host of Irish small firms, including agri-food exporters, who sell their goods and services across the Irish Sea. 

The Organisation for Cooperation and Development last month forecast zero growth for the British economy in 2023, the worst performance of the Group of Seven big economies which includes the US, Canada, Germany, Japan, France, and Italy.

The new British leader chosen by the Conservative Party will also have to grapple with a severe cost-of-living crisis that many economists say has been made worse by Brexit. British business leaders warned on Thursday over a drawn-out vote to decide on a new prime minister.                               

On this side of the Irish Sea, business leaders remain concerned should the new leader continue Mr Johnson's policy of fight-picking with Ireland and the rest of the EU over the protocol, including implicitly threatening a trade war. 

They also recall Mr Johnson's infamous response of "F**ck business" addressing British business concerns around the time of the 2016 Brexit referendum.

Neil McDonnell, chief executive of business group Isme, said Irish businesses will be hoping their British business counterparts will play their part in urging a new start. Mr McDonnell said Brexit was "caving in on itself” because the British never resolved their relationship with the EU, while even die-hards are counting the economic costs. However, he fears Mr Johnson remaining as a caretaker to October will extend the uncertainty over the protocol and continue to damage businesses across Ireland. British proposals for a dual regime, “or an a-la-carte” protocol will not work, he said, and the Tory Party election of a new prime minister “may not be resolved as quickly as we like”. 

Aidan Flynn, head of hauliers group, Freight Transport Association Ireland, said the British government under Mr Johnson has been negligent to its own people “and we can but hope that the next iteration of the UK government will be much more committed to working with the EU”. FTAI companies have been on the front line of the disruption caused by Brexit, he said, adding that Britain remains a significant market for Irish companies.

John Whelan, an expert on trade, and a former head of the Irish Exporters’ Association, said indigenous Irish firms will be hoping for "a new pragmatic leader", while any boost to sterling from Mr Johnson's departure would likely help Irish exporters selling across the Irish Sea into Britain. It will also help resolving the stand-off over the Northern Ireland Protocol. 

Irish businesses rely less on the British market than in the past, but any shift in British policy would be positive “and the signals are it will be better than a government led by Boris Johnson”, Mr Whelan said. The downturn of the British economy cannot all be put at the door of Mr Johnson, he said, pointing to the reliance of Britain on gas and its exposure to the energy crisis. 

Brian Keegan, director of policy and taxation at Chartered Accountants Ireland, said Britain’s proposals over the protocol were harmful to the North's economy, adding he hopes the next British leader will work on a proper solution with the EU. 

Tom McDonnell, co-director of the Nevin Economic Research Institute, or Neri, said the departure of Mr Johnson was good news for the British economy and "hopefully" will lead to the ending of the row over the protocol too. A new leader no longer picking numerous fights with the EU and threatening a trade war "can only be positive", he said. McDonnell said the problems of the British economy were deep-seated, with London's financial services faring well, while other regions have struggled with low productivity for two decades. “They do have a more serious cost-of-living crisis than we have,” Mr McDonnell said, which means the Bank of England will likely have to more aggressive in raising interest rates more aggressively than the European Central Bank. “The outlook for the UK economy is quite weak” even before the full effects of Brexit have taken effect, he added. 

Belfast-based, Neri co-director Paul Mac Flynn, said that solving the damaging economic row over the protocol will depend on who becomes next leader. “It’s still 50:50”, he said, referring to the potential for more uncertainty should Liz Truss win the leadership vote.