In short

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BoI predicts GDP will shrink by 1.6%

A combination of the credit crisis, the housing market collapse and high oil prices will drive gross domestic product (GDP) down 1.6 per cent this year, Bank of Ireland said in its latest quarterly economic outlook.

Dan McLaughlin, chief economist with Bank of Ireland, said "the Irish economy will contract by 1.6 per cent this year, its first decline in national income in 25 years, with net exports providing the only substantial support" . He said the outlook for 2009 was uncertain, "but a further decline in Irish output seems the most realistic assessment". He has forecast a 1 per cent fall in GDP next year.

Recent falls in inflation and an easing of oil prices since July were unlikely to be sufficient to spark the economy to growth in 2009.

The bank has forecast average unemployment of 5.7 per cent this year, with the number of jobless rising to 7 per cent in 2009.

Jameson sales strong worldwide

Worldwide sales of Jameson whiskey grew strongly in the three months to the end of September, but the brand's owner said that its Irish business was down.

Pernod Ricard, owner of Irish Distillers, released results for the first quarter of its financial year yesterday, showing that net sales were 13 per cent ahead of the same period last year at €1.75 billion. Sales in Europe were ahead by 24 per cent at €630 million.

Motorola delays handset spin-off

Motorola is cutting 3,000 jobs and delaying the spin-off of its loss-making mobile phone business after a slide in earnings that the company admitted would see it miss fourth quarter forecasts.

The US handset maker, which revealed yesterday that it had suffered a loss in the third quarter, had agreed earlier this year to the demands of investor Carl Icahn to split off the handset unit. But the company said it would not meet the goal of completing the move by the third quarter of 2009 due to the financial crisis.

In further evidence of the handset unit's problems, its revenue dropped 31 per cent to $3.1 billion in the latest quarter, while its operating loss widened from $248 million to $840 million. - (Financial Times service)

AmEx to cut workforce by 10%

American Express said it will cut almost 10 per cent of its workforce in the latest of a string of cost-cutting measures at financial services companies.

The 7,000 job cuts at American Express are part of a restructuring effort the company hopes will generate $1.8 billion of savings next year. The company said it would suspend management salary increases, put a freeze on new hires, slash investment spending and cut expenses for consulting, travel and entertainment.

American Express this month reported a 24 per cent drop in third-quarter profits. - (Financial Times service)

Household savings fell 735m in 2007

Net household savings fell by €735 million to €2.4 billion in 2007, according to new figures from the CSO. Net disposable income in Irish households rose by €6.4 billion last year to €87.4 billion, while consumers spent a total of €88.1 billion in 2007, up €7.4 billion on the previous year.

The CSO said the State's net savings ratio fell to 2.8 per cent in 2007 from almost 4 per cent the previous year. Net borrowing by households amounted to €14.2 billion last year.

Worldspreads results

A report in yesterday's newspaper on the interim results at spread betting firm Worldspreads stated that revenues were 69 per cent higher at €4.99 million. It should have read that revenues increased by 69 per cent to €8.43 million, from €4.99 million last year.