News Archives - Page 3 of 269 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

Highest weekly earnings in ICT sector – CSO

Average weekly earnings in the economy grew by 3.4% in the year to the end of September, according to the Central Statistics Office. 

Average earnings in the private sector grew by 3.9% while earnings in the public sector grew by 1.3%. 

The highest average weekly earnings were in the information and communications sector at €1,255.49 followed by Financial, insurance and real estate activities at €1,078.43.

The lowest average weekly earnings was in the Accommodation and food service activities at €383.75 followed by the Arts, entertainment, recreation and other service activities sector €495.31.

Wages increased across all sectors of the economy.

The largest increase was in Administrative and support services which rose by 7.2% followed by Information and communications at 6.8%. 

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State fund loses €750k due to ‘human error’

A State fund set up to support jobs in Ireland lost €750,000 on an investment because of a human error which wrongly categorised the money as euro when it should have been in dollars. 

When the rate of exchange moved against the State body it lost thousands because it failed to put in place a mechanism to offset a loss caused by a movement in currencies. 

The investment was made by the State’s Strategic Investment Fund which is part of the National Treasury Management Agency. 

The issue was highlighted in a periodic report by the Public Accounts Committee which questioned the agency about the “control weakness”. 

The report said, “The NTMA explained that the Agency purchased a fund in dollars, but it was not designated or marked on the spreadsheet record as such. It was recorded as a euro fund. 

“Subsequently, when the error was discovered, the dollar exchange rate had moved against the NTMA and the investment return was down €750,000.”

The Public Accounts Committee was informed that the NTMA had corrected the weakness in its processes which it said was caused by “human error”. 

The NTMA said it was confident that such a situation could not happen again. 

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Dublin businesses face rate hike over funding row

Businesses in Dublin city could be facing a big rate increase if the Government refuses to compromise on a funding row with the city council.

The issue centres on the loss of €8.4m because of a change to rate liabilities for Irish Water facilities.

Last week councillors refused to pass a number of measures including reduced community funding, rent increases for council tenants and increased tolls on the Tom Clarke bridge known as the East-Link to balance the budget.

Dublin City Council Chief Executive Owen Keegan said these were necessary because of the loss of €8.4m through a re-evaluation of Irish Water rate liabilities.

The Government had compensated local authorities for the loss of rates due on Irish Water facilities once that body became exempt.

However, the Government informed local authorities last month that this funding would now be calculated according to population size and not on the basis of the number of Irish Water facilities in a particular local authority area.

It means a loss of €8.4 million for Dublin City Council while other councils will get an increase. 

The parties controlling Dublin city council – Fianna Fáil, the Greens, Labour and Social Democrats are demanding a restoration of the funding.

Lord Mayor of Dublin Paul McAuliffe has written to Dublin Chamber of Commerce indicating that councillors may vote for an increase in commercial rates unless the Government restores the funding.

The Lord Mayor has said he has yet to hear back from the Government.

It is believed that a total rate increase of 3.5% – compared to 1% last year – would be needed.

It would mean increases in excess of €35,000 for some large department stores in the city while chains would face multiple increases.

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Brexit hiatus lifts consumer and business confidence

Progress towards the achievement of a Brexit resolution has lifted consumer confidence this month, new research has found.

But the Bank of Ireland Economic Pulse for November also recorded that despite the brighter consumer mood, Brexit uncertainty continues to weigh on businesses’ investment plans.

The index, a composite of separate measures of consumer and business sentiment, registered at 80.6 for the month, up 3.6 on October, but down 9.3 on a year earlier.

It found that one in six people plan to spend more on Christmas presents this year on the back of an increase in consumer optimism in the period – the first in four months.

Bank of Ireland says this rise was due to the lowered risk of a no-deal Brexit cause by the further extension of Article 50.

Festive cheer also seems to be kicking in, with more people assessing their finances in a positive way heading into the festive season.

Businesses too were feeling better about their situation during the month the survey found, with increases in the index across all sectors compared to October.

However, with the outcome of the UK general election still not clear, business investment into next year is set to remain subdued as many firms place their plans on hold. 

Christmas is a vitally important time for retailers and the Retail Pulse was broadly positive, with one in five expecting their festive turnover to be higher than last year.

The housing pulse also saw a mild bounce in November, with nearly half of people expecting house prices to rise in the next year.

However, three in five predict an increase in rents. 

The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and approximately 2,000 businesses on a range of topics.

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Black Friday sees surge in online spending but more people shop in store

Consumers still spend more in store than online on Black Friday, according to research carried out by AIB.

Analysing the card usage habits of shoppers on Black Friday 2018, the spending data revealed that 69% of consumers shopping on the day procured their goods in store with the remaining 31% shopping online.

However, the data points to a big surge in online spending on Black Friday.

Online spend was up 216% on Black Friday 2018 compared to the previous Friday, the study found.

In store spending was up 46% on the same timeline.

The items most commonly purchased on Black Friday are electrical goods, jewellery and clothing.

Consumers spent an average of €174 on electrical goods with consumers in Sligo spending the most at €218.

Tipperary residents spent the most on jewellery (€118) while shoppers in Monaghan spent the most on clothing (€70).

As well as using cards, there has been a surge in recent years in the use of digital wallets.

“More shoppers are using Apple, Google or FitBit Pay to carry out their transactions. This year we have seen a trend in consumers using their digital wallets more as they reach for their phone over their card,” Fergal Coburn, Chief Digital & Innovation Officer with AIB said.

“Apple, Fitbit and Google Pay, which are all available with an AIB current account, allow shoppers to spend up to €5,000 with a simple tap of their device. These accounted for 4% of all transactions last Black Friday and is expected to increase this year.”

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US Fed members unanimously reject negative rates – minutes

US central bankers last month dismissed the idea of taking interest rates into negative territory, something President Donald Trump has called for many times, according to meeting minutes released last night. 

Evidence for the benefits of negative interest rates – lenders must pay borrowers rather than the other way around – has proven “mixed” in countries where it has been tried, according to members of the Fed’s rate-setting Federal Open Market Committee. 

US Federal Reserve policymakers also said at the October 29-30 meeting that the world’s largest economy has “proven resilient” in the face of persistent global difficulties but risks remain “elevated,” including from Trump’s trade war.

But the minutes also confirmed Fed members believe further rate cuts should be unnecessary in the near term, barring major changes to the outlook.

The Fed cut the benchmark lending rate last month for the third time this year, bringing it down to a range of 1.5-1.75%. 

Donald Trump has relentlessly attacked the Fed, demanding lower and even negative interest rates, claiming that relatively higher US interest rates put the country at a disadvantage against weaker economies in Europe and Asia.

During an appearance in New York last week, Trump said the Fed was blocking America from the kinds of stimulus other countries enjoyed.

“Give me some of that money. I want some of that money,” Trump said of negative rates. 

“Our Federal Reserve doesn’t let us do it,” he added. 

The minutes of the Fed deliberations made clear that under the current circumstances US central bankers have all but shut the door to negative rates. 

“All participants judged that negative interest rates currently did not appear to be an attractive monetary policy tool in the US,” the minutes said. 

There is “limited scope” to adopt such a policy, which has not clearly benefited other countries and could have untold consequences for bank lending and household spending, the minutes said. 

And negative rates would introduce “significant complexity and distortions” into the US financial system, Fed members said.  

However, they “did not rule out” that circumstances could arise that would cause them to change their position.

Meanwhile, in general, the US economy appears to be doing well, with the risk of recession lessening in recent weeks. 

But, while job markets and consumer spending remain strong, Fed members generally felt businesses will remain skittish about investing and exports will remain weak due to “trade uncertainty and sluggish global growth.” 

The Fed this year has reversed most of last year’s four increases to bolster a slowing economy and provide “insurance” against looming dangers, including Trump’s trade wars. 

After three rate cuts in row, current interest rate levels are “well calibrated” to support growth and “likely would remain so” as long as the outlook remains broadly the same. 

Efforts to end the trade wars, however, appear to be stumbling, with a partial deal announced last month sliding out of view as Trump threatens to jack up tariffs to pressure Beijing to cooperate. 

Futures markets as of this week predict the Fed will hold its fire until June, when a majority of investors expect cutting to resume.

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New lending rules for credit unions from January

The Central Bank has said it will allow credit unions undertake increased longer term lending, including home mortgage and business lending.

From January next year, new regulations will remove the existing lending maturity limits for credit unions which cap the percentage of their lending for periods of greater than five and ten years. 

These maturity limits will be replaced by new concentration limits, on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets.

The volume of loans a credit union can issue will now be aligned to their asset size, which could enable many credit unions to double or treble their lending in certain loan classes.

 The Central Bank said the changes provide those credit unions who have the financial strength, the competence and the capability, the flexibility to undertake increased longer term lending, including home mortgage and business lending.

The Central Bank’s Registrar for Credit Unions, Patrick Casey, said today’s changes follow a comprehensive review of the lending framework for credit unions. 

Mr Casey said the changes form part of the Central Bank’s commitment to ensuring a responsive regulatory framework.

“It is important that the lending framework remains appropriate for credit unions taking account of their risk management, capabilities, expertise and financial resilience,” he added.

He added that where credit unions wish to undertake increased house and commercial lending, it is important that they understand the risks involved.

The Credit Union Development Association (CUDA) described the introduction of the new rules as a hugely significant development.

A recent survey commissioned by CUDA and conducted by iReach found that 70% of people said that credit unions can and should “take on the banks”.

74% of adults surveyed believe that credit unions could make a bigger impact and should collaborate to compete with the banks.

Kevin Johnson, CEO of CUDA, said that up until now the level of loans the credit union could give out was based on the percentage of loans already issued. 

He said this was holding credit unions back from providing more loans to support their members and their communities. 

“Now the volume of loans will be based on a percentage of assets of the credit union. With an average of just 28% of assets currently lent out, the regulations will allow many credit unions to do more loans for more people,” Mr Johnson said.

CUDA had lobbied for the changes since 2015, adding that they will bring much needed competition to the market for mortgages, home renovations and business loans.

But Mr Johnson also said he was disappointed that credit unions will be prohibited from supporting aspects of Government Housing Policy such as the Repair and Leasing Scheme. 

“There is no logic to prohibiting credit unions from providing much needed loans to their members who want to help rebuild Ireland through the Repair and Leasing Scheme,” he said. 

“We are also disappointed with the limit put on the number of business loans a credit union can do, in a time when many credit union members are small businesses are crying out for funding,” he added.

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Christmas still ‘make or break’ for many retailers

The average retailer still relies on the six weeks around Christmas for up to 30% of its annual trade, according to the Ibec group, Retail Ireland.

The sector has benefitted from rising wages and an increase in disposable income across the economy in recent years.

However, footfall on the streets of towns and cities across the country has been falling with the growing popularity of online shopping.

“In terms of the end of year performance, it’s crucial. The challenge is in attracting disposable income that exists in the consumer market,” Thomas Burke, Director of Retail Ireland said.

“There are 2.3 million people at work across the economy. Wages are increasing and disposable incomes are up, but retail is under pressure from variety of other sectors to attract that disposable income. It’s crucial for Irish retailers when they review their annual numbers,” Mr Burke added.

The sector is facing into the annual ‘Black Friday’ shopping phenomenon which is described as something of a ‘double-edged sword’ for the retailers as they try to strike a balance between attracting customers with discounts while making some return at the same time.

Mr Burke was speaking today as Retail Ireland launched the first national apprenticeship scheme for the retail sector.

“It’s aimed at people who work in the sector and have ambitions to be managers. It’s a level 6 programme aimed at retail supervisors. We’re looking at the entry grade to retail management.

“From an employer’s perspective, it’s a talent identification tool – an opportunity to put their people on a path towards development and management roles in the future.”

The skills involved in the programme include human and digital skills and retail specific knowledge.

It also offers the opportunity for participants to move into a retail degree programme.

“There’s a clear trajectory here towards senior maangement role in industry. We’re trying to build the future leaders of the retail sector with the skills required,” Mr Burke concluded.

European car sales up 8.6% in Oct, driven by VW rebound – ACEA

Passenger car registrations in Europe rose 8.6% in October, to their highest level since 2009, driven by robust demand in Germany and France.

The figures were also boosted by a rebound in demand for Volkswagen cars, which posted a 29% gain.

Registrations rose to 1.214 million cars in the countries of the European Union and the European Free Trade Agreement (EFTA), statistics published by the European Auto industry association ACEA show today. 

Registrations were depressed this time last year as carmakers struggled to certify new vehicles to meet the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). 

Volkswagen, which is also preparing to launch a new version of its Golf, is whittling down inventories of the old model.

This helped the German brand to outsell Renault, which posted a 15.8% gain and Hyundai which saw sales rise 13.4%.  

A 12.7% overall rise in Germany and an 8.7% increase in France helped to outweigh a 6.7% drop in registrations in Britain, ACEA statistics showed.

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More time spent on social media than calls – ComReg

New research shows that consumers here are using our phones less and less for phone calls and more for messaging and social media. 

The research from communications regulator ComReg also finds that almost everyone in the country now has a phone – with Samsung and Apple the most popular brands. 

Consumers are spending about a half an hour a day making regular calls, down slightly on the same survey conducted two years ago. 

People are also spending more time sending emails and chatting on social media – 46 minutes a day on average compared to 33 minutes in 2017. 

Consumers are also sending more and more messages via apps like WhatsApp, instead of old-fashioned texts. 

The average mobile phone user sends 11 and a half texts a day, while they sent almost 29 messages via apps like WhatsApp, which is up from about ten a day two years ago.

The amount of time spent on video and music streaming has more than doubled with consumers now spending more than 20 minutes on each of those each day. 

Consumers also appear to be happy with their mobile phone services, as ComReg found that just one in four have ever switched providers.

77% of people said they were happy with the network coverage they were getting.

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