Today in the press

ECONOMISTS EXPECT IRISH PRICE DEFLATION NEXT YEAR - Inflation will turn to deflation next year, economists predicted yesterday, as the Central Statistics Office (CSO) published figures showing that prices across a range of goods and services are coming down. The Irish Times says that with clothes, transport and furniture prices all falling in October, the annual rate of inflation dropped to 4%, down from 4.3%. The fall in inflation is expected to continue over the coming months as the recent European Central Bank (ECB) interest rate cuts, the impact of a stronger euro and lower oil prices all take effect. The ongoing retreat of oil prices from a summer spike of more than $150 a barrel meant petrol and diesel prices fell more than 5% last month, while home heating oil was down 11%. The fall in oil prices, which is the result of lower demand as the global economy teeters on the brink of recession, will eventually translate into lower electricity and gas prices, said National Irish Bank economist Ronnie O'Toole. Food prices, which were escalating at an annual rate of more than 9%, are now growing at an annual rate of 4.6%, having fallen in October for the fifth successive month. The prices falls are partly the result of cheaper imports from the UK.

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INTEL MAY CUT IRISH JOBS AS SALES FORECAST IN $1 BILLION DIVE - Chip-making giant Intel would not rule out job losses at its Irish division last night after the company slashed its sales forecast by over $1 billion, writes the Irish Independent. "We may have to take pragmatic decisions," warned Intel's Leixlip plant spokesman, Colin McHale. He would not discount the possibility of job cuts at the site, which is Intel's European manufacturing centre. Ireland is Intel's manufacturing and technology centre for Europe, employing around 5,000 people, with an innovation and R&D presence here. Intel drastically reduced its fourth-quarter revenue forecast to about $9 billion, instead of the $10.9 billion figure given just a month ago by global chief Paul Otellini, as technology spend worldwide continued to spiral downwards. And the sector's outlook is continuing to change for the worse.

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UK HOUSING MARKET 'FAR WORSE' THAN FIGURES SUGGEST - House prices across the UK have already fallen far further than official data and market indicators suggest, Rightmove, the online estate agent warned yesterday, as it revealed that up to 300 estate agents were quitting its service every month. While the latest figures from leading mortgage lenders such as Halifax suggest that prices are down by 15% from their peak, Rightmove said the falls were up to two-thirds higher. Miles Shipside, the commercial director of Rightmove, said: "Estate agents tell us that the actual prices that are being achieved [initially between buyers and sellers] for property are down by about 20-25% beneath peak asking prices. That has not come out in the national indices." The London Independent says that his revelation suggests that house prices have not only fallen much further than the highly regarded surveys of Halifax and Nationwide, which both track house prices based on agreed mortgages, but could also be lagging behind the situation on the ground.

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SALES SLUMP SEES BEST BUY SOUND ALARM - America's largest electronics retailer, Best Buy, has warned of the toughest trading conditions in its 42-year history as cash-strapped consumers stop splashing out on flat-screen TVs, audio equipment and other hi-tech household gadgets. The Guardian says that Best Buy's shares dived 9.5% at the opening bell on the New York Stock Exchange. The profit alert is likely to raise questions over plans to expand its chain of distinctive blue superstores into Europe in a deal with Carphone Warehouse. "Since mid-September, rapid, seismic changes in consumer behaviour have created the most difficult climate we've ever seen," said Brad Anderson, Best Buy chief executive. "Best Buy simply can't adjust fast enough to maintain earnings momentum for this year." Best Buy said a "modest" decline in like-for-like sales in September was followed by a 7.6% drop in October. It believes comparable sales could fall by between 5% and 15% over the next four months. Best Buy is a familiar name in US shopping centres with 1,300 stores employing 165,000 people. Its difficulties came just 24 hours after rival chain Circuit City filed for bankruptcy, becoming the biggest US retail victim of the economic downturn. Analysts said there were signs the slump in shopping activity was worsening.