BANK OF IRELAND MORTGAGE MOVE SET TO AFFECT 60,000 CUSTOMERS - Bank of Ireland is expected to increase its standard variable rate today by half a percentage point. The move will affect about 60,000 of the bank's customers and cost on average €20 extra a month in repayments.
Karl Dieter, of Irish Mortgage Brokers, says the Bank of Ireland decision comes as no big surprise and says the increases are moves by the banks to make sure that their operational profits start to cover their operational losses. He says the mortgage increase will cost about €760 more a year for those with the average sized mortgage - after-tax money. Before tax, the increase will cost the individual over €1,000. The broker says this is like half another pension levy for those in the public sector and about a 3% wage cut for those in the private sector. He says that the change comes into effect on April 16, so Bank of Ireland customers do have a few days to choose a fixed rate, although he warns that fixed rates are also set to go up.
The broker says today's move by Bank of Ireland will take about €90m out of the economy, money which will not now be spent between small and medium businesses and which will not be circulating or doing anything productive except going back into the banks. On ECB interest rates, Mr Dieter says that he expects the bank will not raise rates until 2011.
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CONFIDENCE RETURNING TO RECRUITMENT MARKET - We remain in a recession but jobs continue to be created in our economy. This week alone we had a number of announcements - Sierra Support Services said it will recruit 90 people after winning a contract to provide boiler installation and servicing services to Bord Gáis. And in Tuam, Co Galway, Ocean Harvest Technology says a revolutionary new product it has developed, based on seaweed, will help create 30 new jobs.
Irish recruitment group Sigmar report a significant growth in recruitment for the first quarter of 2010. According to new figures published by the group, the three month period saw a 27% quarter on quarter growth from the last quarter of 2009. This is the second consecutive quarterly growth in job placements.
Sigmar director Frank Farrelly says 2009 was a tough year, but based on a surprisingly busy December, recruitment in the first quarter of this year is up 27% from the last quarter of last year. He says a lot of the jobs are in accountancy, with areas like compliance and financial services starting to recruit specialist positions again. Other strong areas include credit control, online gaming, online marketing and IT.
Mr Farrelly points out that the number of companies recruiting is still down sharply from levels two years ago. He says that while coming from a low base, things are starting to improve. He says the 'madness' of 2006 and 2007 will probably never be seen again, but confidence is beginning to seep back into the economy.
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MORNING BRIEFS - The European Central Bank yesterday decided to keep rates at 1% and a lot of commentators now believe rates will not go up until next year.
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Oil prices fell yesterday, dropping further away from recent 18-month highs as traders took their cue from lower stock markets, the strengthening US dollar and growing US crude stockpiles. US crude dropped 76 cents to $85.12 a barrel, after spiking above $87 on Tuesday. London's Brent crude fell 70 cents to $84.89.
*** The credit rating agency Standard & Poor's has left its rating for Ireland unchanged after assessing the details of recent announcements on the Irish banks. S&P lowered Ireland's rating early last year from the top AAA level, and downgraded Ireland a second time some months later after it increased its estimate of the cost of supporting the banking system. The Government borrows money on the international bond market to meet its day-to-day spending needs. The interest rate it pays is dependent on how risky Ireland is perceived, and this is gauged by ratings agencies like S&P.
*** The head of the European Central Bank has told reporters the EU's plan to help Greece out of its deficit and debt crisis is 'a workable framework'. Speaking after the ECB left its main interest rate at a record low of 1%, Jean-Claude Trichet also said defaulting on its debt was 'not an issue' for Greece.
*** On the currency markets, the euro is worth $1.3350 cents, and 87 pence sterling.
