CHIEF ECONOMIST WARNS OF THREATS TO ECONOMY - The Irish economy is on a knife-edge, poised between "overheating" and a major Brexit-related downturn, the State's chief economist has warned.
John McCarthy described the situation as "extraordinarily complex" and uncertain, saying it made forming budgetary policy extremely difficult. He said overheating could transform rapidly into "underheating" as a result of a cyclical downturn internationally, made worse by Brexit and trade tensions between the US and China, writes the Irish Times. Mr McCarthy was speaking at a budget conference hosted by the Economic and Social Research Institute (ESRI) . "At the moment we're on the verge of overheating, the economy is at full employment, the output gap is probably moving into positive territory, wages are beginning to pick up," he said, adding that this situation could change very quickly. So we could rapidly go from an overheating situation right now to underheating in six months' time if you get some of these issues beginning to happen," said Mr McCarthy. This would have implications for the Government’s current budgetary stance and Budget 2020, which is due to be presented just before the UK's scheduled exit from the EU on October 31st. While economists typically advocate taking money out of the economy in the case of overheating, usually in the form of tax rises or spending cuts, the opposite is true in the case of a severe shock, with governments then encouraged to boost demand through tax cuts and/or increased spending.
CHIP-MAKER TO SHUT FOR 3 DAYS OVER HUAWEI'S BAN - Workers at the Irish operations of US multinational Analog Devices are bracing for a three-day shutdown following US President Donald Trump's blacklisting of Chinese telecoms firm Huawei.
Analog employs 1,200 people at its plant in Raheen, Co Limerick, many involved in making semiconductors for Huawei smartphones. It's understood they have been asked to take three days of paid holidays as part of a production slowdown next month. It comes after the US Commerce Department's blacklisted the Chinese giant, and effectively halted its ability to buy American-made parts and components, says the Irish Independent. US-owned businesses are affected regardless of where they manufacture. In the wake of these restrictions, Google has suspended activity with the giant, which supplies huge numbers of smartphones into the market. The move is a huge worry for staff at Analog Devices's Raheen plant. Headquartered in Massachusetts, Analog is one of Limerick's biggest employers, with its complex on the edge of Limerick city its main European base. One worker there, who spoke on condition of anonymity, said: "The consensus is, people have been asked to take holidays, or unpaid leave if you don't have holidays remaining. It could be anything from three to five working days. It's to ensure we don't build up an inventory because of the uncertainty out there at the moment."
FINES OF €100,000 OR JAIL FOR INSURANCE FRAUD - Insurance fraud is now punishable with fines of up to €100,000, and/or prison for up to ten years, Detective Sergeant Alan Govern of the Garda National Economic Crime Bureau has warned.
Detective Sergeant Govern told the annual Insurance Conference, hosted by Ronan Daly Jermyn (RDJ) in Westin Hotel Dublin, that the Gardaí are working closely with the insurance industry to investigate people giving false or misleading evidence or verifying affidavits. He outlined to attendees from 30 different insurance companies how they can better enable the Gardaí in prosecutions arising out of exaggerated and fraudulent personal injury claims, reports the Irish Examiner. Detective Sergeant Govern said: "Staged collisions, induced collisions, and deliberately contrived collisions as well as grossly exaggerated injuries and opportunistic fraud cannot be tolerated by Irish society. An Garda Síochána are committed to continuing to work in collaboration with the Insurance industry and other stakeholders to detect patterns of insurance fraud and thoroughly investigating allegations of insurance fraud." He reminded the audience of insurance professionals where a person is found guilty of giving false or misleading evidence or verifying affidavits they face potential fines of up to €100,000, and/or prison for up to 10 years. Detective Sergeant Govern also advised the conference attendees on the steps that claims handlers need to take to ensure that their complaints in respect of fraudulent claims are sufficiently robust for the initiation of a subsequent prosecution.
TROUBLED KIER TO SELL OFF ASSETS - One of Britain’s biggest contractors is preparing to sell its housebuilding unit amid increasing evidence of financial pressure on the group.
Kier Group has sounded out advisers about the potential to sell the division, which is understood to be valued at between £100 million and £150 million. The plans to bolster its finances are being made as Euler Hermes and Tokio Marine HCC, the trade credit insurers, have this week withdrawn cover insuring Kier’s suppliers from any potential losses, says The Times. This could potentially add more pressure on the group. Trade credit insurance pays out to a company’s suppliers when it stops paying its bills. A group of insurers, including Euler Hermes and Tokio Marine, made a similar move before Carillion collapsed in January last year.