The rate has fallen for two months in a row having hit 2.9pc in November.

According to the Central Statistics Office, winter sales and lower mortgage costs brought the rate down 0.5pc in January.

Year-on-year, however, the rate increased.

The price of clothing and footwear fell by 10.7pc while furniture and other household goods dropped by 2.5pc.

Clothing and footwear prices fell by 10.7pc during January, while prices of furniture and other household equipment dropped by 2.5pc.



Irishindependant.ie

"Greece is a specific and unique case and will not be repeated in the case of other euro area countries," Mr Rehn said yesterday. "Besides, the Irish programme is on track. Despite facing difficulties and painful adjustments, Ireland is on the way to recovery."

The comments came as the Greek government races to complete a list of reforms demanded by finance ministers before the end the month to unlock the €130bn bail-out agreed early yesterday morning.

The Greek parliament must now pass anti-bribery laws and open up protected professions such as the law and medicine to competition within ten days if the country is to get the latest bailout.

News of the agreement sent yields on Irish and Portuguese bonds lower. European stocks fell from a six-month high amid speculation the latest bailout deal won't be enough to solve the debt crisis. National Bank of Greece, the largest Greek lender, plunged 9.5pc.

The Stoxx Europe 600 Index closed down 0.5pc last night although it was still 24pc higher than it was last September at the height of the crisis.

In a blow to the Irish government's efforts to reduce the amount paid on our loans, Swedish Finance Minister Anders Borg said his country probably won't follow euro-area countries in lowering the interest rate on loans to Ireland. Swedish taxpayers expect to be compensated close to market conditions, he told reporters in Brussels. Sweden has pledged to lend €600m to Ireland although the money has yet to be paid.

In Portugal there were increasing signs that the country may also seek changes to its bailout.

Opposition leaders, businesses and trade union leaders all want the government there to renegotiate the terms of Portugal's €78bn bail-out agreement following disturbances in some areas and painful austerity.

Junior Finance Minister Brian Hayes reiterated in Brussels yesterday that Ireland would not be seeking a similar deal to the Greek deal by burning bond holders.

"This is an issue for Greece in the first instance -- this is about Greece getting through the issues that they face and putting them on a sustainable debt path," Mr Hayes told reporters after the 13-hour meeting where he was standing in for Finance Minister Michael Noonan.

Mr Hayes said he was "hopeful" that talks on renegotiating the cost of the promissory notes to fund the wind-down of the former Anglo Irish Bank would be buoyed after the ECB's decision to get involved in the Greek bailout.

"Obviously we're hopeful. We will continue our dialogue with the ECB, the commission, the IMF and the troika," he said.

"There are a number of outstanding issues.

"We'll be working on the promissory notes, obviously, but we're not putting any specific timeline on it. I think that wouldn't be helpful at the time," he said.

The ECB and national central banks will send any profits on their Greek government bonds back to Athens.

Mr Hayes said the Irish Central Bank's holdings of Greek debt were "negligible, a small sum of money".

""Greece is a specific and unique case and will not be repeated in the case of other euro area countries," Mr Rehn said yesterday. "Besides, the Irish programme is on track. Despite facing difficulties and painful adjustments, Ireland is on the way to recovery."

The comments came as the Greek government races to complete a list of reforms demanded by finance ministers before the end the month to unlock the €130bn bail-out agreed early yesterday morning.

The Greek parliament must now pass anti-bribery laws and open up protected professions such as the law and medicine to competition within ten days if the country is to get the latest bailout.

News of the agreement sent yields on Irish and Portuguese bonds lower. European stocks fell from a six-month high amid speculation the latest bailout deal won't be enough to solve the debt crisis. National Bank of Greece, the largest Greek lender, plunged 9.5pc. The Stoxx Europe 600 Index closed down 0.5pc last night although it was still 24pc higher than it was last September at the height of the crisis.

In a blow to the Irish government's efforts to reduce the amount paid on our loans, Swedish Finance Minister Anders Borg said his country probably won't follow euro-area countries in lowering the interest rate on loans to Ireland. Swedish taxpayers expect to be compensated close to market conditions, he told reporters in Brussels. Sweden has pledged to lend €600m to Ireland although the money has yet to be paid.

In Portugal there were increasing signs that the country may also seek changes to its bailout. Opposition leaders, businesses and trade union leaders all want the government there to renegotiate the terms of Portugal's €78bn bail-out agreement following disturbances in some areas and painful austerity.

Junior Finance Minister Brian Hayes reiterated in Brussels yesterday that Ireland would not be seeking a similar deal to the Greek deal by burning bond holders.

"This is an issue for Greece in the first instance -- this is about Greece getting through the issues that they face and putting them on a sustainable debt path," Mr Hayes told reporters after the 13-hour meeting where he was standing in for Finance Minister Michael Noonan.

Mr Hayes said he was "hopeful" that talks on renegotiating the cost of the promissory notes to fund the wind-down of the former Anglo Irish Bank would be buoyed after the ECB's decision to get involved in the Greek bailout. "Obviously we're hopeful. We will continue our dialogue with the ECB, the commission, the IMF and the troika," he said. "There are a number of outstanding issues.

"We'll be working on the promissory notes, obviously, but we're not putting any specific timeline on it. I think that wouldn't be helpful at the time," he said.

The ECB and national central banks will send any profits on their Greek government bonds back to Athens. Mr Hayes said the Irish Central Bank's holdings of Greek debt were "negligible, a small sum of money".

Greece is a specific and unique case and will not be repeated in the case of other euro area countries," Mr Rehn said yesterday. "Besides, the Irish programme is on track. Despite facing difficulties and painful adjustments, Ireland is on the way to recovery."

The comments came as the Greek government races to complete a list of reforms demanded by finance ministers before the end the month to unlock the €130bn bail-out agreed early yesterday morning.

The Greek parliament must now pass anti-bribery laws and open up protected professions such as the law and medicine to competition within ten days if the country is to get the latest bailout.

News of the agreement sent yields on Irish and Portuguese bonds lower. European stocks fell from a six-month high amid speculation the latest bailout deal won't be enough to solve the debt crisis. National Bank of Greece, the largest Greek lender, plunged 9.5pc. The Stoxx Europe 600 Index closed down 0.5pc last night although it was still 24pc higher than it was last September at the height of the crisis.

In a blow to the Irish government's efforts to reduce the amount paid on our loans, Swedish Finance Minister Anders Borg said his country probably won't follow euro-area countries in lowering the interest rate on loans to Ireland. Swedish taxpayers expect to be compensated close to market conditions, he told reporters in Brussels. Sweden has pledged to lend €600m to Ireland although the money has yet to be paid.

In Portugal there were increasing signs that the country may also seek changes to its bailout. Opposition leaders, businesses and trade union leaders all want the government there to renegotiate the terms of Portugal's €78bn bail-out agreement following disturbances in some areas and painful austerity.

Junior Finance Minister Brian Hayes reiterated in Brussels yesterday that Ireland would not be seeking a similar deal to the Greek deal by burning bond holders.

"This is an issue for Greece in the first instance -- this is about Greece getting through the issues that they face and putting them on a sustainable debt path," Mr Hayes told reporters after the 13-hour meeting where he was standing in for Finance Minister Michael Noonan.

Mr Hayes said he was "hopeful" that talks on renegotiating the cost of the promissory notes to fund the wind-down of the former Anglo Irish Bank would be buoyed after the ECB's decision to get involved in the Greek bailout. "Obviously we're hopeful. We will continue our dialogue with the ECB, the commission, the IMF and the troika," he said. "There are a number of outstanding issues.

"We'll be working on the promissory notes, obviously, but we're not putting any specific timeline on it. I think that wouldn't be helpful at the time," he said.

The ECB and national central banks will send any profits on their Greek government bonds back to Athens. Mr Hayes said the Irish Central Bank's holdings of Greek debt were "negligible, a small sum of money".

Irishindependant.ie



The single currency eased 0.3 per cent, falling back below $1.31 after EU sources said euro zone finance ministers were not satisfied all Greece's political parties were committed to fresh austerity measures and might withhold bailout funds until April.

European shares shed some of their gains though US futures still pointed to a higher opening on Wall Street, with the release of January factory output and capacity utilisation figures later in the day expected to add to signs of economic improvement.

Riskier assets like equities had resumed their rally earlier today on hopes a growing flood of money from major central banks will support growth as data showed the euro zone's debt-laden economy headed - as expected - for a recession.

Sentiment was also supported by promises by Chinese leaders to keep investing in euro zone debt.

The euro fell to $1.3084, retreating from a session high of $1.3191 and well off the February 9th peak of $1.3322.

Economic output in the 17-country euro zone fell a widely-expected 0.3 per cent in the last three months of 2011 compared to the previous quarter, and is likely to contract further in the current quarter to mark its second recession in three years.

But the French economy posted a surprise expansion in the last quarter of 2011 and a slowdown in Europe's biggest economy, Germany, was not quite as bad as expected.

"Activity remains close to very weak levels but at least the (European) economy doesn't seem to be on a free-fall," said Annalisa Piazza, market economist at Newedge Strategy.

Marco Valli, chief euro zone economist at UniCredit Research noted that forward-looking indicators like surveys of purchasing managers show that the economy is likely to stabilise or resume moderate expansion in the first three months of 2012.

The FTSEurofirst index of top European companies was up 0.9 per cent at 1,079.13 points today while, helped by gains in Asia, the MSCI global index was up 0.6 per cent.

The gains in Asia came as central bank governor Zhou Xiaochuan reiterated commitments by premier Wen Jiabao that China was ready to play a bigger role in solving Europe's debt problems.

Demand for stocks and riskier currencies, however, remains tempered by the ongoing risks from the euro zone debt crisis.

In Greece, the conservative New Democracy party said its leader, Antonis Samaras, had sent a letter to the European Union and IMF committing himself to implementing a new austerity package, which was a key condition to secure approval of a €130 billion bailout.

Meanwhile oil prices gained over $2 a barrel today, after Iranian state TV said Iran had stopped exports to six European states in retaliation for European Union sanctions on the Islamic state, adding to supply concerns.

Brent crude was up 65 cents at $118.00 a barrel, having traded as high as $118.30 earlier in the session. US crude rose 87 cents to $101.61.



Reuters

Markit's Eurozone Services Purchasing Managers' Index (PMI) fell to 49.4 from January's 50.4, missing even the lowest forecast in a Reuters poll of 44 economists whose predictions centred on a rise to 50.6.

A reading below 50 signifies a contraction.

"There is a possibility GDP will be flat but chances are we could easily slide back into a very small contraction," said Chris Williamson, chief economist at data compiler Markit.

The region's economy contracted 0.3 per cent in the dying months of 2011 so a second quarter of contraction would meet the technical definition of recession. A Reuters poll last week suggested it will probably wallow in a relatively mild downturn until the second half of this year.

The 17-country region's manufacturing sector fared little better, with the PMI barely rising to 49.0 from January's 48.8, spending its seventh month below 50 and missing expectations for a faster rise to 49.5.

The factory output index held steady at January's 50.4 but new orders fell for the ninth month, with the index at 47.1, slightly up from January's 46.5.

"We need order growth to pick up but it is still in decline, they are still relying on their pipeline of previous orders to sustain these levels of activity. In the service sector they are stimulating demand through price cuts, manufacturers are also squeezing their margins," Mr Williamson said.

Although input costs continued to rise, services firms were forced to cut their prices charged for the third month running, with that sub index falling to 48.3 from January's 48.7, its lowest reading since July 2010.

Despite the price cutting to win business, the composite PMI, which combines the services and manufacturing data and is often seen as a growth indicator, fell to 49.7 from last month's 50.4.

The flash data was collected largely before euro zone finance ministers agreed a €130 billion bailout rescue for Greece and Markit said this could lead to sharper than normal revisions when final figures are released at the start of March.

The rescue deal buys time to stabilise the currency region and strengthen its financial firewalls, but it leaves deep doubts about Greece's ability to recover and avoid default in the longer term.

While the debt crisis rages on, euro zone consumer confidence rose for the second consecutive month in February as Europeans showed timid signs of increased spending, official figures showed yesterday.

But earlier data from Germany, Europe's biggest economy and the region's growth engine, showed growth slowed from last month's seven-month high and it was a similar picture in France.

Private sector firms reduced their work force for the second month running in a bid to cut costs with the composite employment index only nudging up to 49.5 from January's 49.4.

"It is not a great sign. There have been widespread job losses in the periphery, which you would expect. More worryingly there was virtually no job creation going on in France and in Germany the rate of growth has eased quite sharply," Mr Williamson said.

Euro zone unemployment reached 10.4 per cent at the end of last year, its highest since the introduction of the European single currency, official data showed late last month. It is seen peaking at 10.8 per cent in the second half of this year.



Reuters

While he welcomed the latest bailout deal for Greece, Mr Bean said in a speech at a business event in Glasgow yesterday that the euro zone debt crisis remains the single biggest risk to the UK economy, which may see slow growth until mid-year.

"Despite the recent more encouraging signs, we continue to expect underlying growth to remain sluggish in the first half of the year," Mr Bean said.

The expected fall in inflation should help a modest pickup in household spending, he said, noting that the strong retail sales seen in January could be a first sign of this.

"But while growth should gradually strengthen, the continuing headwinds from the unwinding of excessive debt and the government's continuing fiscal consolidation mean that the pace of recovery is likely to remain moderate by historical standards," he said.

Mr Bean's analysis largely echoed the views presented in the bank's February inflation report in which the bank predicted that growth would improve later this year and that inflation would be close to its 2 per cent target over the key two-year horizon.

That forecast has fuelled the view the bank may not add further stimulus when the latest £50 billion round of asset purchases is complete in May.

Mr Bean said the euro crisis remained the biggest risk for Britain despite the new bailout deal for Greece.

"While the agreement between the Greek government and the euro-area authorities is certainly welcome, there still remains a possibility that events could unfold in a disorderly and damaging fashion at some stage in the future."

Mr Bean defended the bank's early-February decision to pump £50 billion more into the economy in its quantitative easing programme of asset purchases, saying that without this inflation would have been likely to stay below the bank's 2 per cent target in the medium-term.

But he also reiterated the bank's view that it could not set monetary policy in a pre-emptive way to shield the economy against worst-case scenarios.

"It would make little sense to set the level of asset purchases so as to try to counteract an extreme event whose likelihood, timing and magnitude we have no realistic way of assessing," he said.

In his speech in Glasgow, Mr Bean also touched on the debate about the possibility of Scottish independence, saying the central bank could not define its own role in such a scenario.

"If the referendum should result in a vote in favour of an independent Scotland, the associated monetary arrangements would then be one of many matters needing to be settled," he said. "But the exact form of those arrangements would be for the Westminster and Scottish parliaments to decide, not the Bank of England."

Scottish National Party leader and first minister in Scotland's devolved government, Alex Salmond, has said he would want to keep the pound, at least temporarily. This would allow Scotland to control taxes, spending and borrowing while the Bank of England would continue to set monetary policy.

Reuters

The Dublin-based broker calculated that the eventual national decline from peak to trough will be 60pc.

Average prices have fallen 47pc so far which implies that prices must fall by at least another 20pc before hitting rock bottom.

"The boost from domestic demand will not be material until 2013. Unemployment, currently 14.3pc, will remain above 10pc until 2016," NCB economist Brian Devine warned.

"As such, there should be no surprise that property prices continue to decline, mortgage arrears continue to rise and retail sales remain weak," he said.

Prices in Dublin have already fallen close to this amount with apartment prices in Dublin down 58pc and house prices in Dublin down 54pc.

Mr Devine said he remains worried about the fundamentals underpinning the Irish economy but kept forecasts for GDP growth this year unchanged at 0.3pc or one whole percentage point below the Government's forecast.

Despite this challenge, the stockbroker said the country has showed the characteristics required to put the economy back on the right track.

Earlier, a government adviser said austerity was not working for Ireland. The experience of Ireland and Greece "tells me that austerity doesn't work", said Michael O'Sullivan who is head of research at the Credit Suisse private banking unit and author of 'Ireland and the Global Question'.

Mr O'Sullivan, who has also taught in Oxford and Harvard, was one of eight people appointed as independent members of the National Economic and Social Council by Taoiseach Enda Kenny last November.

"Ireland has had a classic and very big and bad asset price bubble," he said. "That is the cause of our malaise."

Earlier, he said that "Ireland has the additional straitjacket of the eurozone austerity mantra, which for Ireland may have the short-term effect of creating lots of unemployment".

Irishindependant.ie

Official figures show that German exports topped €1 trillion for the first time in 2011, but fell towards the end of the year as the euro zone debt crisis hit demand for goods made in Germany.

Europe's biggest economy exported €1.06 trillion in the whole of last year, the national statistics office Destatis said in a statement. Imports also rose to a record €902 billion.

But exports declined by 4.3% in December alone to their lowest level since April, as the effects of the euro zone's debt crisis increasingly made themselves felt.

With imports also falling by 3.9%, Germany's trade surplus - which had ballooned to €158.1 billion for the whole of 2011 - shrank to €13.9 billion in December.

The full-year data place Germany as the world's number two exporter behind China which posted exports worth a total €1.43 billion and a trade surplus of €117 billion in 2011.

China, along with the euro zone's second-biggest economy, France, are Germany's main trading partners.

On a 12-month basis, German exports to fellow euro zone countries - which buy around 40% of all German exports - declined by 3.3% in December, while exports to countries outside the single currency area jumped by 14.7%.



RTE.ie

Prime Minister Lucas Papademos said that the heads of the three parties backing his interim government received the 50-page document, drafted with the country's debt inspectors, earlier today.

A meeting of Mr Papademos with the party leaders has been moved back to give them more time to study the draft.

The talks had already been postponed for three days to make time for negotiations with the European Union, the European Central Bank and the International Monetary Fund, on whose approval the continued flow of Greece's vital €130bn in rescue loans depends.

Without the bailout, Greece would not have enough money to pay off a big bond redemption next month, triggering a default that could send shockwaves around financial markets and the global economy.

The three organizations, known as the troika, have demanded new private sector wage and pension cuts, public sector sackings and cuts in health, pension and defence spending.

The troika's proposals have horrified unions, who held a general strike on Tuesday, as Greeks have been hit with a spate of income cuts and drastically increased taxation over the past two years.

But Athens has minimal ground for manoeuvre. Without the rescue loans, the country will default on its massive debts in March, when it faces a huge bond redemption.

Disagreement still remains on the extent of those cuts between parties who face national elections in late April - after the debt deals have been sealed and implemented. The majority Socialists, main rival conservatives and the small right-wing LAOS party are also at odds over when the elections should be held.

The Socialists, who handed over power to Mr Papademos in November and are trailing badly in opinion polls, want him to stay through parliament's four-year term that ends in late 2013. But conservatives, buoyed by their lead in opinion polls, are demanding an April vote according to plan.

Irishindependant.ie



The highlight of the visit is tomorrow morning’s Invest in Ireland  roundtable discussion in New York hosted by former US president Bill Clinton.

The idea for the event comes from a commitment given by Mr Clinton at the Global Irish Economic Forum in Dublin last October where he offered to help Ireland attract more foreign investment by hosting a gathering of US business leaders.

“American companies now have two trillion dollars in cash reserves. You ought to target the companies that you know are rolling in dough,” Mr Clinton said at the time.

Mr Kenny will be joined on the trip by Tánaiste Eamon Gilmore and Minister for Jobs, Enterprise and Innovation, Richard Bruton.

A Government spokesman said the aim of the event, moderated by governor of Maryland Martin O’Malley, is to engage with business and economic leaders and encourage them to invest in Ireland.

“The principal message to potential investors will be that Ireland is open for business and that now is the time to invest in our economic recovery.”

The event will be followed by a forum where some 100 people from the Global Irish Network are expected to participate.

Mr Kenny will use his address at the forum to detail the progress Ireland is making in dealing its economic challenges while Mr Gilmore will outline progress made since the Global Irish Economic Forum was held in Dublin last year.

Tonight the Taoiseach will address an Irish Business Organisation reception in New York.



Irishtimes.ie

The central government's 2011 shortfall came in at €90.8 billion, €4.5 billion better than forecast in last year's budget, meaning France should comfortably beat its overall state deficit target for last year of 5.7 per cent of GDP.

President Nicolas Sarkozy said recently the overall public deficit - which includes social security and local authority spending - could have dipped as low as 5.3 per cent of gross domestic product last year, putting France well on track to meet this year's target of 4.5 per cent.

Today's figures showed that, while revenues were flat last year, the central government was able to slash its deficit as spending tumbled by 14 per cent to €365.4 billion.

Spending in 2010 had been boosted by a €32 billion one-off charge for a government future investment programme covering everything from industry to research and teaching, and an exceptional payment to regional governments to cover the cost of a reform to France's local business tax.

France's Court of Auditors - a quasi-judicial body charged with reviewing public finances - said in a report that the government last year had taken only one tenth of the measures required to keep its promise of balancing the public finances by 2016 and that much tougher steps would be needed.

"At this rate it would take 10 years to get to budgetary equilibrium," said Didier Migaud, first president of the Court of Auditors. "The biggest steps will remain to be taken in 2013 and 2014."

The Court of Auditors estimated that France had reduced its structural deficit - excluding cyclical economic effects - to 4.5 per cent of GDP in 2011, down by just 0.5 of a percentage point from the previous year.

It called for Mr Sarkozy, who trails his Socialist rival Francois Hollande in polls ahead of the first round of presidential elections in April, to clearly lay out the government's plans for meeting this commitment.The court urged the government to slash €15 billion from the myriad exemptions that litter France's complex tax code.

Mr Sarkozy's government has pledged to cut its public deficit to 4.5 per cent of GDP this year and to within an EU ceiling of 3 per cent by 2013, but its task is being complicated by a slowdown in French growth.



Reuters