Business Irish

Wednesday 27 August 2014

Deflation fears grow

Published 31/05/2014 | 02:30

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ANNUAL consumer inflation slowed in Italy and Spain in May, heightening concerns about deflation risk in the eurozone as the bloc's central bank gears up for an expected growth-boosting shift in policy next week.

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Italy's EU-harmonised inflation rate eased to a weaker-than-expected 0.4pc year-on-year from 0.5pc in April, statistics office ISTAT said.

Corresponding inflation in Spain was 0.2pc, down from 0.3pc, data from the National Statistics Institute in Madrid showed.

US SPENDING FALLS

US CONSUMER spending unexpectedly fell in April after the biggest surge in almost five years as incomes slowed, a sign the largest part of the US economy would take time to accelerate.

Household purchases, which account for about 70pc of the economy, dropped 0.1pc, the first decrease in a year, after a revised 1pc gain the prior month that was the strongest reading since August 2009.

ALLERGAN BID ALTERED

Valeant Pharmaceuticals International yesterday said it will adjust the cash component in its takeover bid for Botox-maker Allergan for the second time in a week, contingent on the two sides negotiating.

Valeant said it would pay $72 in cash – up from $58.30 on Wednesday – and a 0.83 share of Valeant stock for each Allergan share. Shares of Allergan jumped 5.1pc after a trading halt, while Valeant stock climbed 1.1pc.

SWISS BANKS HIT

SWISS banks under investigation for allegedly aiding US tax evasion face the prospect of bigger fines than they bargained for that could dent their capital and force some to cut dividends.

The Alpine nation's bankers got a jolt last week after Credit Suisse agreed to plead guilty to helping wealthy Americans evade taxes and pay a fine of $2.6bn (€1.9bn), more than double the amount it had set aside for the purpose of harsher than expected penalties following the investigation by the US Department of Justice.

SHIPPING ACTIVITY UP

IRISH shipping and port activity rose by 4pc in the first three months of the year when compared to the same period last year, according to data from the Irish Maritime Development Office (IMDO).

The latest analysis also indicates that four of the five principal freight segments grew in the first quarter of 2014.

Irish Independent

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