Popcorn factor no consolation for miseries yet to come

“Ireland Completely Sells Out of Popcorn” announced satirical website Waterford Whispers News on Thursday, as Liz Truss resigned as British prime minister after a 44-day reign of omni-chaos so bizarre it made Downing Street feline Larry the Cat seem the sane choice to replace her.

But comedy and tragedy, like the British and Irish economies, are closely related. Political instability in London is rarely good news for Ireland. As especially ignorant as Truss was on the Northern Ireland protocol, who would dare guarantee her successor will be much improvement?

The exchequer might be rolling in tax receipts, meanwhile, but the Irish economy remains forever vulnerable to external shocks — including those provided, unwittingly or otherwise, by our nearest neighbour.

Still, if you don’t laugh, you’ll cry, right?

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And though it’s not quite the same as full-on schadenfreude, the “at least things aren’t as bad here” relief factor could well have lent real, if minor, support to Irish consumer sentiment this month, according to the economist analysing the Credit Union Consumer Sentiment Index.

“It could be argued that high-profile UK policy difficulties may encourage Irish consumers to draw some comfort from a notably more stable, sustainable and supportive domestic economic policy stance in this country,” said Austin Hughes this week.

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The contrast between the broad support for the Government’s Budget 2023 package and the fallout from the UK’s mini-budget “may have had some small positive influence” on sentiment in October, he concluded.

The survey took place before Truss fired chancellor of the exchequer Kwasi Kwarteng, before new chancellor Jeremy Hunt ripped up the pair’s havoc-wreaking fiscal plans and before Truss herself gave up the ghost. In theory, this points to a further potential “popcorn” boost to Irish consumer sentiment in November.

But, as Britain’s ex-ex-ex prime minister Theresa May was fond of saying, let us be clear: consumer confidence is in the toilet and will take some time to drag itself out of the bowl. Winter energy bills are yet to land in inboxes, while interest rates are expected to stay on an upward curve, creating a time bomb of misery for mortgage borrowers with expiring fixed-rate agreements. Food price inflation will continue as long as Russia’s war on Ukraine does. No semi-amusing psychodrama will compensate.

In the UK, a general election does not have to be held until January 2025. The next Irish one might not be until as late as March 2025. The mood is unlikely to become any more forgiving toward parties in power in the interim. No matter how bad things seem now, they can always get worse. Just ask Larry the Cat.