Lagarde warns of ‘shocks’ ahead: Jobs forecast promises a sunny future

The sun shone metaphorically and splendidly on Ireland yesterday.

Lagarde warns of ‘shocks’ ahead: Jobs forecast promises a sunny future

The sun shone metaphorically and splendidly on Ireland yesterday.

Just as we basked in the exceptional and much-appreciated sunshine, a report from the EY financial accountancy firm predicted a bright future.

EY forecast that something just shy of 240,000 jobs will be created across the island within four years.

The firm also revealed that 21 financial services companies have confirmed that they will move some or all of their operations from the UK to Ireland following Brexit, making Dublin the most popular post-Brexit destination, out-stripping Frankfurt, Luxembourg, or Paris.

However, the report also warned that just 5% of companies in the Republic, and only 3% in Northern Ireland, have Brexit contingency plans.

Even if it is almost impossible to plan for a known unknown, these figures suggest it is time to be far more proactive about Brexit planning, even if, at this late stage, that may involve more crystal-ball gazing than is comfortable.

This was the theme exercised by the head of the International Monetary Fund, Christine Lagarde, when she spoke in Dublin yesterday.

Though she recognised “that the sun is shining on the Irish economy”, and that the employment rate and growth of the economy are remarkable compared to the conditions that prevailed in her first visit to Ireland in 2013, she warned that Ireland has to prepare for international shocks.

Visiting to mark the 20th anniversary of our embrace of the euro, she also suggested that more women should be appointed to the boards of banks, so any future crisis might be averted.

Focussing on some of the issues that exercised EU leaders at the emergency summit on immigration in Brussels last weekend, Ms Lagarde sounded a note of caution: “We meet at a moment when the EU and euro area are in the midst of difficult decisions about their future.

Populist movements — from Brexit to the recent Italian elections — have called into question the value of European integration.”

Her concern on how Brexit might prove a negative force only reflects the intensifying murmurings in British boardrooms.

Already, the UK’s five main business lobby groups have warned they’re “deeply concerned” that time is running out for a Brexit deal that protects hundreds of thousands of jobs.

That frustration led to aerospace giant, Airbus, warning it may pull investment from Britain, if there is not a workable deal, an outcome it described as “catastrophic” and which would threaten its 14,000 jobs.

Car-maker, BMW, also warned that, without clarity within a couple of months, it would have to prepare alternative plans, damaging Britain.

Inevitably, the fervent Brexiteers have offered an alternative view, but one thing both views have in common is that they imagine a more inflexible, regulated, and barrier-ridden business world post-Brexit.

This, of course, begs the obvious question, one that has not been satisfactorily answered yet: Who will benefit from Brexit? Sadly, this question is far harder to answer than its converse: who will suffer because of Brexit?

Amidst all of this uncertainty, it seems prudent to take Ms Lagarde’s advice and prepare for the as yet unknown.

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