The Republic of Ireland faces a fresh threat to its efforts to attract foreign direct investment after Northern Ireland's finance minister said he could undercut the Republic's 12.5pc rate.

Sinn Fein MLA Máirtín Ó Muilleoir said he would consider the move after Chancellor George Osborne announced plans to lower the UK rate to below 15pc.

Stormont had planned to match the Republic of Ireland's 12.5pc rate by 2018.

But now Mr Ó Muilleoir said the Executive may need to consider reducing it below that.

Mr Ó Muilleoir told BBC Radio Ulster's Nolan Show on Tuesday: "I think he has put a horse and carriage through our policy.

"There's no doubt about that because we had two reasons for it, one was to be different from the British rate and be the same as the rate in the south of Ireland.

"We know, especially in north America, that Ireland is viewed very favourably and actually they view Ireland as one island, they are not big on borders.

"And if we had have been able to say, the tax rate is the same across the island, I think that would have been compelling, that's no longer true.

"Unless we go for a different strategy and reduce it ever further, and that will need to be considered."

Belfast Telegraph