In short

A round-up of today's other business news in brief ....

Pressure on ECB to cut rates further

German corporate sentiment unexpectedly worsened this month to its lowest level since unification in 1990, raising pressure on the European Central Bank to make further interest rate cuts to support the economy.

The IFO economic research institute said yesterday its business climate index, based on a monthly poll of about 7,000 firms, fell to 82.6 in February from 83 in January, dragged down by deepening gloom on the state of the global economy.

“Hopes that the battered economy might be about to turn around took another backlash today,” Carsten Brzeski, an economist at ING Financial Markets, adding that the ECB would be forced to respond to the latest decline in sentiment.

“While other central banks have continued monetary easing since the beginning of the year, the ECB stood aloof, taking a period of reflection,” he said. “Next week, the ECB will clearly get back into action and cut rates by at least 50 basis points.”

IFO said in a statement that German firms remained “basically sceptical” about the outlook. “On the whole, the survey results dont signal a cyclical turning point,” the institute said.

Assembly lines at some Volkswagen plants in Germany fell silent yesterday as Europe’s biggest carmaker switched to a short working week for the first time in 26 years. – (Reuters)

43% fall in value of Irish home loans

The value of home loans taken out in the Republic between June and September last year fell 43 per cent to €3.2 billion, according to the latest figures.

The Department of the Environment’s latest Housing Statistics Bulletin shows that house prices fell and mortgage lending dropped sharply as 2008 entered its second half.

It states that “12,629 loans were approved for house purchase with a value of €3.2 billion in the third quarter of 2008. This was a decrease of 37.8 per cent in volumes and 43.2 per cent in value compared to the same quarter of 2007”.

It also says that the average price of a new house was €301,680 during the same period in 2008, a year-on-year fall of 5.5 per cent. Second homes were down 10.3 per cent to €335,762.

Foreign investment holding up well

Ireland continues to punch above its weight in terms of attracting foreign direct investment, according to a new survey published yesterday.

The data show the Ireland attracted 1.9 per cent of global foreign direct investment (FDI) in 2008 despite the relatively small size of the economy.

The US remains the most significant source of FDI for Ireland, accounting for two of every three jobs created.

Overall, Ireland ranked 14th out of the world’s top 30 economies in 2008 in terms of FDI. India, China, the US and Mexico were the dominant states in term of FDI last year, according to the National Irish Bank/OCO Investment Performance Monitor.

The survey is based on figures provided by FDI Intelligence, a specialist division of the Financial Times.

Ó Catháin new Petroceltic chief

Explorer Petroceltic has appointed Brian Ó Catháin as chief executive. Mr Ó Catháin succeeds John Craven, one of the company’s founders, in the role. He has been executive chairman since April 2007.

Eircom Web Innovation Fund

Eircom has announced details of its second Web Innovation Fund which will award €100,000 to a selection of promising web-based applications.

The company’s fund was first launched in November 2007 to promote, mentor and sponsor innovative web applications in the Irish Internet industry.

Up to four applications will be selected to share in the fund. I The winners will also receive access to training and business mentoring.

Further details are available at http://labs.eircom.net.