EUROPEAN CENTRAL BANK NOW ON 'INFLATION WATCH' - The European Central Bank warned yesterday about inflationary risks in the euro zone. After its governing council meeting, ECB president Jean-Claude Trichet said the bank is prepared to increase interest rates to keep prices stable. Analysts believe this could happen as soon as the autumn. This comes up because last month consumer price inflation rose to 2.2%, above the ECB's target of 2% for the first time in more than two years.
Alan McQuaid, from Bloxham Stockbrokers, says that it is clear from Mr Trichet's statement yesterday that the ECB is on 'inflation watch'. He says it would be foolish to raise rate any time soon given the huge level of uncertainty surrounding euro zone debt levels. He points out that in 2008, the ECB continued to raise rates when other central banks were cutting and will be in no rush to make such a wrong move again. The economist says that with the global economy on the road to recovery the price of commodities will continue to rise. This is especially true in the case of oil and food. Mr McQuaid predicts that oil prices will hit $100 a barrel sooner than moving back down to $80.
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MORNING BRIEFS - Global defence and security company BAE Systems Holdings has made an offer for Irish technology company Norkom, which is valued at about €217m. The board of Norkom, which provides software to the financial services industry, says it considers the deal to be 'fair and reasonable' and has recommended that it goes ahead.
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An interim management statement from food group Greencore says that provided the euro stays between 85 and 88 pence sterling the group expects to deliver strong growth this year. Greencore says it has a strong balance sheet, and that the first three months of its financial year have seen operating performance in its two key categories of Food to Go and Prepared Meals remaining strong. Greencore also says it continues to recommend to shareholders that they back a proposed merger with Northern Foods, which faces a possible rival offer from food tycoon Ranjit Boparan.
*** Drinks group C&C has re-affirmed its operating profit guidance in the range of €102-106m for the full year. C&C says the severe impact of bad weather on pubs in November and December was in part alleviated by robust UK Magners off trade. It also says the Irish trading environment is still challenging and unpredictable.
*** The world's biggest computer chip maker Intel has shrugged off concerns that its core PC market is under pressure from tablets and smartphones, reporting strong fourth-quarter earnings and giving an upbeat forecast for this year. Intel reported profits of 59 cents a share on revenues of $11.46 billion.
*** On the currency markets this morning the euro is trading at $1.3373 cents and 84.38 pence sterling.
