In this section of our website we have a series of occasional opinion pieces, reflecting some of our views on developments in business and economics both in Ireland and internationally.
Mario Draghi kicked off his presidency of the ECB off to a shock-surprise start with his cut of 0.25 per cent in the interest rate. Already the commentators are calling him Super Mario! The rate cut announced today was not flagged but nonetheless not surprising. Europe is in the eye of a storm and anything other than a cut in rates would have done nothing to stabilise the markets. Draghi had to act.
The decision of Thursday 6 October by the ECB governing council probably did not come easy. Judging from the subsequent press conference there were divisions, though a vote was averted. If stimulatory in intent, it will not have the desired effect: Europe is in recession and the ECB decision to hold interest rates won’t change that.
For anyone involved in business these are challenging times. Prospects look to be extremely difficult. The Euro will not collapse – although it may go to the wire as political efforts reach a conclusion.
While the IMF health-checks for the global economy, its components, the public finances and the banking system make for gloomy reading down in the detail what do they say about Ireland?
The ECB decision to raise the rate it charges commercial banks drawing on its liquidity facility was inevitable. In what is likely to be a high-interest rate environment, Government focus on issues of job creation and funding of business is critical.
A snap view and comment on the latest Irish inflation figures from the Central Statistics Office (CSO) and a quick take on official and commercial interest rate prospects.