TAX REVENUES 'STABILISING' - There are few signs of an early economic recovery in the latest figures on just how much tax the Government is raising. The latest Exchequer figures, published yesterday evening, show that up to the end of July almost €17.2 billion came into the state's coffers - but that is 1.4% or €247m below targets. VAT receipts and taxes on company profits are slightly ahead; but income tax is down reflecting lower earnings for ordinary consumers across the economy.
Davy's chief economist Rossa White says that while the tax revenues are gradually stabilising, the momentum is not 'fantastic'. He says he had been expecting the figures to be more in line with the Budget targets, but says a key month for the Department of Finance will be in November when they get the taxes from the self-employed sector of the workforce. He also points out that the momentum outside of the income tax side of things is pretty good with taxes such as VAT in line with Government predictions - a sign of strengthening consumer spending.
Noting that capital spending is currently running below targets, Mr Rossa says that this is similar to trends in recent years. However, he says that there is more of a chance of keeping companies alive if the Government decides to spend money now rather than in six months' time.
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MORNING BRIEFS - Rupert Murdoch's media giant News Corporation has reported full year profits of €1.9 billion. You can see how the company has turned around its fortunes when you look at how its fourth quarter profit of €664m compares to a €154m loss for the same time last year. Murdoch owns newspapers like The London Times and Wall Street Journal, TV networks such as Sky and Fox plus movie studios and he says he is confident of growing all his businesses. He is also spearheading the so-called internet newspaper paywall that will end free access to his online content.
*** British bank Barclays has reported a 44% increase in pre-tax profits to €4.8 billion for the first half of the year. The cost of its bad debts has fallen by almost a third.
*** Lloyds Banking Group, which is the parent of Bank of Scotland Ireland and the now departed Halifax Ireland, yesterday reported pre-tax profits of €1.9 billion. But it said that 44% of its €32 billion in Irish loans are now impaired. Lloyds said that conditions in Ireland remain challenging with evidence of further falls in property prices and rising unemployment.
*** Insurer Aviva has reported operating profits of €1.5 billion for the second quarter of the year, a 21% improvement. Any profits it makes outside the UK is now of key interest to the Irish taxman after it announced it was centralising the head office for all of its European businesses in Dublin.
*** On the currency markets, the euro buys $1.3140 cents and 82.9 pence sterling.
