One unforeseen consequence of Liz Truss's ill-fated attempt to defy the basic laws of economics is that Britain is now being charged an "incompetency premium" by the markets.

In a curious way, this may have some benefits for Ireland.

While investors have reacted well to the clear-out of 10 Downing Street, the UK is still paying more to borrow money after its disastrous attempt to introduce huge unfunded tax cuts than it was before it fell off the budgetary wagon.

Diplomatically, this has huge consequences.

As Britain was due to renegotiate the Northern Ireland Protocol, which imposes checks on goods crossing the Irish Sea between the North and Britain, the new Prime Minister Rishi Sunak may find that the EU has the whip hand.

The protocol is politically toxic within sections of the unionist community, because it is seen as imposing a trade border between Northern Ireland and the island of Britain.

Some businesses also complain it is too cumbersome.

However, it does give firms in the six counties the edge as they are in the single market while remaining outside the EU.

That aspect of the protocol allows for free trade between the Republic and Northern Ireland.

The EU is willing to try to make the protocol more palatable and Minister for Foreign Affairs Simon Coveney believes there is a potential landing zone for a new agreement.

Liz Truss's short-lived administration was due to knuckle down to serious talks with the EU Commission vice-president Maroš Šefčovič.

While the mood was more positive than it had been under Boris Johnson's government, politicians in Dublin were yet to see concrete signs of progress.

The re-appointments of James Cleverly as Foreign Secretary and Chris Heaton-Harris as Northern Ireland Secretary by Rishi Sunak will help.

Simon Coveney already has good contacts with both politicians so discussions won't be starting from scratch.

But if those negotiations were to break down or if the UK raised the prospect of overriding the protocol with its own legislation, Brussels has the power to threaten trade sanctions against Britain.

That would be a mechanism for imposing an economic punishment on the UK for failing to reach a negotiated solution to resolve difficulties around the protocol.

Nobody wants a trade war - nor is it likely.

But markets work on the basis of what might happen. And even the hint of trade sanctions could potentially be disastrous for Britain.

In Dublin, ministers believe the combination of new Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt would be loath to take any action that could cause a stir in the markets.

After Liz Truss's economic debacle, any prospect of a trade war between the UK and the EU would be likely to result in an immediate impact on Britain's borrowing costs and sterling.

Liz Truss resigned last week

It means that the ability of the UK to drive a tough bargain will be severely limited.

And this could increase the likelihood of Britain arriving at a negotiated settlement to resolve the issues around the protocol.

If a resolution was to happen, it would give certainty to businesses across the island.

At the same time, it is still quite possible that the UK will call elections in Northern Ireland this week.

That could mean negotiations continuing during an election campaign which might make the protocol a political football.

If Britain and the EU agreed a deal, it could be very tempting for the Democratic Unionist Party led by Jeffrey Donaldson to reject it in the heat of a campaign as he jostles with the Ulster Unionist Party (UUP) for votes.

Arguably, leaving the outcome of protocol negotiations until after the polls close could more sensible.

But the EU is unlikely to allow considerations about he DUP affect the timing of a deal.

Many in Brussels think an agreement could be done by Christmas if there is willingness on both sides.

If a deal happens, it could open the door to re-establishing the Stormont Assembly.

But there are a lot of "ifs" before that would happen.

In a peculiar way, Liz Truss may have done Ireland a favour.