EURO ZONE RATES SET TO STAY STEADY AS ECB REMAINS CAUTIOUS ON OUTLOOK - The last few days has been very busy on the economic front with numbers out on everything from jobs and redundancies, to interest rates and the Government finances. Yesterday's Exchequer figures which showed that the tax take for the first eight months of this year is running just over €400m behind Government targets. The Exchequer deficit - the gap between spending and tax receipts - was €18.7 billion in the first eight months of this year.
Rossa White, economist at Davy Stockbrokers, says the Government may have underestimated the recovery in the export sector, especially the multi-national export sector and so as a result the corporation tax take may be doing a little better than had been expected. He says the slide in income tax take is down to the increased levels of job losses, and also due to the slowing levels of immigration, while emigration has picked up. He says this is positive in terms of social welfare payments, but has a negative effect on income tax.
Mr White says the Irish economy will reach a floor as early as the first quarter of 2010. He says that both the US and UK economies will pull out of recession in the third quarter of 2009 and points out that the euro zone was very close to pulling out of recession in the second quarter of this year. However, Ireland will be at least half a year behind the rest of our main trading partners.
Ahead of today's ECB meeting, he says that Jean-Claude Trichet is likely to keep interest rates steady despite the fact that the German and French economies pulled out of recession last month. He says however that the ECB boss will remain very cautious about the outlook. He predicts there will be no increase in euro zone rates of at least nine months.
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MORNING BRIEFS - A review of how the the US Securities and Exchange Commission missed Bernard Madoff's fraud says it overlooked more than ample evidence, including six complaints, that raised red flags about his Ponzi scheme. An internal review of the SEC and its efforts at tracking Madoff found a 'thorough and competent investigation was never performed'.
*** Blackrock International Land reported half yearly results this morning. It says it has no plans to realise any assets in the current market conditions. It says that as a result of the economic downturn, the property markets in which Blackrock operates remain difficult and have not functioned actively or normally during the first six months of 2009. The few transactions that have taken place have been at prices that do not appear to reflect fair value.
*** On the currency markets, the euro is trading at $1.4270 cents and 87.64 pence sterling.
