London is no longer an economic Eden compared to Dublin, it just wears its faults more gracefully

There has been plenty of anxious hand-wringing over the state of the British economy lately. Inflation, low productivity, falling living standards and years of wage stagnation have left a tangible mark on the nation’s psyche. But, they have also provided the country with a chance for self-reflection: “Britain should stop pretending it’s a rich country,” says Bloomberg; “Britain is now a poor nation”, claims the Telegraph; low growth is a “slow-burning crisis”, warns the Economist. Yikes.

As Britain navigates these economic headwinds the impacts will be felt far beyond the country’s own borders. This historic rebalancing will reverberate across the world. The home of the industrial revolution seeing its 21st century wages fall behind its western European partners is hardly an insignificant moment. And the Anglo-Irish relationship, which has been stretched to near-breaking point in the past seven years, will continue on its path of cosmic restructuring.

This relationship has experienced a sea-change over the past decade. Brexit did not set this in motion but it was certainly a powerful catalyst. On one side Ireland has drifted further into the European Union’s sphere of influence, taking its cues from Brussels where it once may have taken them from London. The pandemic was perfect evidence of this: Ireland heeded the advice of its European colleagues far more closely than it followed Britain. And, from the London perspective, the years of wrangling over Brexit deals generated animus towards the Irish political establishment.

The UK and Ireland have been equal partners in changing the shape of the relationship into something unrecognisable. Now Britain’s economic woes are set to entrench this psychological shift. Schadenfreude has been a common feature of the Irish response to Brexit – bearing the sentiment that somehow Britain’s suffering is just deserts for such a foolish decision to leave the bloc; that Britain’s struggles are merely historic justice in action.

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And the questions are always the same. How could they not see that erecting trade barriers with your closest trading partners would generate economic catastrophe? Was the Office for Budget Responsibility’s analysis – that trade as a share of GDP has fallen by 2½ times more than in any other G7 country – not a highly predictable outcome?

Sure. But aside from this attitude being plainly uncharitable, and certainly not in the spirit of fostering comity between close neighbours, it also fails to recognise the weight Britain bears on Ireland. Britain’s economic story is closely – inextricably – tied to our own. Sneering at the mess Brexit has wrought on the British economy, therefore, is a disposition as pompous and navel-gazing as any Brexiteer is capable of. Because when Britain gets poorer Ireland suffers too. Or, to revert to old adage, when Britain sneezes, Ireland catches a cold.

First, we can think about the swath of young emigres leaving Dublin for better living circumstances in London: a less hostile rental market, greater earning opportunities. The profile of this group is different from their predecessors. They tend to be young professionals with good jobs, they live in leafy Hackney (on a recent walk through London Fields I counted more Irish accents than English ones) and crucially, they experience England through the lens of London.

All of this will have a distorting effect. London’s wealth has long concealed the entire country’s financial circumstances, economist Noah Smith points out. So the insulation the capital city provides for young emigres is nice, but it’s a blanket around barbed wire. London may not feel like a place in active decline but aspects of this nationwide decline still seep into daily life: it is very difficult to get a doctor’s appointment, landlords are rapacious here too, inflation has sent the cost of living soaring. London is no longer an economic Eden compared to Dublin, it just wears its faults more gracefully.

Beyond this immediate effect on the Irish in London, it hardly needs stating that Ireland’s economy will naturally be affected by Britain’s low growth. Adverse shocks to the UK – inflation, reduced consumer spending, high energy costs – “all lead to a reduction in economic activity in Ireland”, a paper released by the Central Bank of Ireland argues. And, in spite of every knock-on effect of Brexit, the UK still remains a crucial trading partner for Ireland. When the UK’s economy falters, that seeps across the Irish Sea pretty quickly.

All of this seems fairly obvious. It is surprising then that this serious adjustment in the British economy goes rather under the radar in Ireland. And as important as the direct impacts are – the fate of young emigres, the effect British growth has on Irish trade, the centrality of London to a lot of Irish business – it goes deeper than that. This is not a story of fiscal one-upmanship, nor is it a contest about who is richer than who. Rather, it is about hundreds of years of interdependence between two neighbours, and the epochal shift these economic changes might herald. In a post-Brexit Britain the country is fundamentally reorganising and reinterpreting its place in the world. Ireland will feel it.