IRELAND SET TO TAKE CENTRE STAGE AT ECB MEETING TODAY - Governors of the European Central Bank meet today in Frankfurt. It is not expected that there will be any change in interest rates announced after their meeting, but it is expected that the governing council will talk about the recent rise in the euro, and about phasing out its liquidity measures, introduced to deal with the financial crisis. Ireland is also expected to feature heavily on the ECB's meeting agenda.
Neil Gibson, of Ernst and Young, says that the ECB will keep euro zone interest rates steady at 1% today as the recovery remains too fragile. But he says that Ireland and our deficit woes will take centre stage at the Frankfurt meeting. The Irish problems are causing the ECB great concern as it fears that the country is another Greece in the making. He says the ECB wants to know if Ireland is good for its debt or will it have to bail out the country. He says he does not believe Ireland is another Greece, because we have a lot of things going for us, including our strong export industry and our favourable corporation tax rates.
Mr Gibson predicts that rates will not rise until the middle of next year and says that when the rise does come it will not do as much damage if the rates increases were implemented now because the world economy will have improved much more.
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MORNING BRIEFS - AIB has put a price on its shares in US bank M&T, which it owns 22.4%. It says each note, which will be exchanged for a share when the deal is passed by shareholders, will be priced at $77.50. That is a 1.8% discount, and is smaller than expected, following the breakdown of its talks with Spanish bank Santander. AIB is holding an extraordinary general meeting on November 1 to look for shareholder approval. The bank says the deal will raise proceeds of €1.5 billion and generate about €0.9 billion of equivalent equity capital. It says its board will use the equivalent equity capital to meet part of AIB's revised Prudential Capital Assessment Review requirement of €10.4 billion which the regulator called for last week. In a statement released overnight it said the net cash proceeds will be used as an additional source of liquidity to support its business activities.
*** Aer Lingus says it load factor improved by 3.5 points last month. Compared to September 2009 long haul load factor was 81.8%, an increase of 10.2 points, with capacity falling by 15.5%. Short haul load factor was 80.6%, a decrease of 0.2 points on September 2009, with capacity down by 3.3%. Total passenger numbers were 927,000 last month, down 3.4% on September 2009.
*** Retailer Argos says its hiring 700 part time staff for December and January in its 39 Irish stores.
*** On the currency markets the euro is trading at $1.3927 cents and 87.65 pence sterling.
