Morning business news - April 4Friday 04 April 2014 13.13
During his monthly press conference yesterday, European Central Bank president Mario Draghi sarcastically thanked the IMF head Christine Lagarde for her advice that the bank should do more to try to stave off deflation. But the bank offered little yesterday other than the promise to act and to use unconventional measures to stimulate growth in the euro zone economy.
John Finn, managing director of Treasury Solutions, says that deflation is a big threat because so much in an economy is linked to prices, including wages. He says that compared to the US and UK, Europe has acted much slower to relation to the economic crisis. The US Federal Reserve pumped billions into the US economy at an early stage of the crisis and also reduced interest rates to record lows. The Bank of England also launched its QE programme and its interest rates have stayed at 0.5% for the past five years. In comparison, the ECB cut rates more slowly and when other central banks were cutting, actually increased rates at one stage during the crisis.
Mr Finn says that the money the ECB has managed pumped into the euro zone economy has not trickled down to the "real economy" and is staying within the financial sector. He predicts that the ECB will cut rates to 0.1% by June, adding that the results from the euro zone banks' stress tests will also be a key area of focus for the ECB in the coming months.
MORNING BRIEFS - Aer Lingus Regional proved the one bright spot in March for Aer Lingus. Both short haul and long haul passenger numbers fell compared to the same month last year as Easter fell in March 2013 but is in April this year. Aer Lingus regional, operated by Stobart Air, saw a 5.6% rise in passenger numbers, however. Overall Aer Lingus carried 797,000 passengers in March down from 844,000 the same month last year.
*** The number of people working in international financial services here has risen by 6,000 since 2009. A new report from Financial Services Ireland, a division of employers group Ibec, shows 35,700 are now working in the sector here. While the bulk of that is concentrated in Dublin's International Financial Services Centre 10,000 of those jobs are located outside Dublin. The average salary in the industry is estimated in the report as €67,000.
*** The European Parliament has voted to scrap mobile phone roaming charges from the end of next year. If approved by member states, the move would reduce the cost of calling, texting or using the internet on mobile phones in any EU country to the same level paid in a consumer's home country.
*** Shares in Just Eat, the online takeaway food service provider, rose 10% after it made its stock market debut in London yesterday. The company, which operates in 15 countries including Ireland, is now valued at £1.5 billion. That means Just Eat, which handles online orders placed by customers for 36,000 takeaway restaurants, has a market value 60% higher than Domino's Pizza.