The pound’s slide against the euro has begun to trigger concerns on the continent that the UK is seeking to gain a competitive advantage over its European Union partners.

Sterling has fallen by more than 25 per cent on a trade-weighted basis since the autumn of 2007, raising the question as to whether Britain is letting its currency fall to help its exporters at a time when the eurozone is falling more deeply into recession.

Brian Lenihan, the Irish finance minister, in January directly accused the UK of running a policy of “competitive devaluation”, putting other countries under “immense pressure”.

As the pound has stabilised a little in recent months, the Bank of England now sees the benefits of a lower currency, not in rising exports but in a rapid fall in imports contributing positively to economic growth.

Source: www.ft.com

Brian Lenihan the finance minister delivered the toughest budget in the history of the state. The main points include:

– €3 billion in tax rises and spending cuts
– Doubling the income and health levies
– Cutting child benefit

Typically a person earning €100,000 per annum will pay an extra €333 per month into the governments coffers.

In other news Moody’s increased its expectation of losses on Irish bank loan portfolios due to continued deterioration in real estate prices, the likelihood of more corporate defaults and the erosion in residential loan performance.

Straightened times indeeed.

The New York Times has run a sensationalist piece on the sudden economic implosion in Ireland. This comes on the back of the Sean Dunne expose back in Janaury and ahead of todays emergency budget announcement.

Similarily BBC Radio 4’s venerable Today programme ran a feature this morning on the perceived pitiful economic situation in Ireland.

Added to this was the recent Sunday Times magazine feature on Ireland’s beleagured economy.

There seems to be a sense of schadenfreude to the current international coverage. Just how accurate is all this doom-filled commentary? Does the irish media have a riposte?

Sensationalist Schadenfreude?

Links: www.nytimes.com, www.bbc.co.uk/radio4 & www.sundaytimes.co.uk

THE EUROPEAN Central Bank (ECB) surprised financial markets by cutting its main interest rate by a smaller than expected 25 basis points yesterday to a new low of 1.25 per cent, triggering a sharp rise in the euro.

– House prices increased by 0.9% in March
– House purchase activity reaches highest level since May 2008
– Welcome signals of market improvement but too early to talk of house price recovery

House prices rose in March for the first time since October 2007, according to the Nationwide.

The building society said that property prices increased by 0.9% compared with the previous month.

That reduced the annual rate of house price falls from 17.6% in February to 15.7% in March, with the average UK home costing £150,946.

Nationwide described the change as a “surprise bounce” and warned against concluding the market had turned.

Source: Nationwide Building Society
Link: http://tinyurl.com/clqvu9

Work is well underway on this huge development being built by London-Irish developer Eamon Lyons. It is located on Old Street on the edge of London’s financial district – The City. It is due for completion in 2010. The development comprises of two 14 and 16-storey towers.

Eamon Lyons has over 20 years experience in the East End. Originally from the west of Ireland, Lyons cut his teeth with Sean Mulryan’s Ballymore Homes in the late 1980s and early 1990s but eventually established his own company, Tudorvale Homes, which has been building houses and apartments for over a decade.

Artists impression of the finished development

RYANAIR CHIEF executive Michael O’Leary yesterday said the airline would continue to pare back its services from Dublin airport in a move to up the ante against the Irish Government’s proposed introduction a €10 air travel tax.

Passengers traveling through Dublin Airport over the weekend have reported it being incredibly quiet – “it’s usually pandemonium in there”. Officially there was a 12% decline in the Passenger throughput at Dublin Airport for the month of February, over the same period last year, according to the Dublin Airport Authority (DAA).

Meanwhile the DAA is investing €2bn in new facilities over the next decade and planning permision has been granted for a new runway. Hmmmmm…?

White Elephant?

Sir Anthony O’Reilly is to step down as chief executive officer at Independent News & Media in May. He will be replaced by his son Gavin.

The announcement was made in a statement to the Irish Stock Exchange early this morning.

http://www.irishtimes.com/business/

Eurozone interest rates have been slashed by a half percentage point to the lowest level ever as the European Central Bank responds to continental Europe’s worst recession since the second world war.

The ECB said its main interest rate would fall from 2 per cent to 1.5 per cent, bringing the total cut since early October to 275 basis points, and taking the eurozone’s monetary guardian into territory not charted since the euro’s launch in 1999.

http://www.ft.com/world/europe