The Irish Independent reports that more than 400,000 homeowners with tracker mortgages will benefit from record low interest rates for up to two more years.

But those on variable rates will pay the price in higher rates to compensate banks for losses they incur on tracker packages. It means that the gap between monthly repayments on an average tracker mortgage and an identical variable one now stands at €150 a month -- and it will continue to widen.

The European Central Bank (ECB) yesterday indicated its key interest rate would not rise from its record low level until 2012 at the earliest. However, an estimated 200,000 to 300,000 people with standard variable rate mortgages, who have already suffered several interest rate rises this year, are set to face even more hikes.

The repayment divide is highlighted by the example of two homeowners with identical 25-year mortgages of €250,000.

The difference between their monthly mortgage repayments now stands at €150, assuming the tracker rate is 2.1pc and the variable rate is 3.5pc.

But this is expected to widen to up to €200 a month as lenders impose a new set of increases on standard rates later this year, well ahead of any rate rise from the ECB.

Five lenders have imposed rate hikes this summer on standard variables, the second spate of rises this year.

A sixth lender, Permanent TSB, has imposed three rises in standard variable rates since last summer.

Now experts say standard variable rates are set to rise again, while tracker mortgage rates are unlikely to go up until well into 2012.

Those with standard variable rates are effectively cross subsidising those on trackers. This is because banks are losing heavily on trackers.

However, there has been some evidence that homeowners with variable rates are acting to fix their borrowing costs.

Some tracker rates are set as low as 0.5pc above the ECB rate. With the ECB rate at 1pc for the past 16 months, this meant a mortgage rate of just 1.5pc.

The wedge between the repayments for someone on a tracker compared with a standard variable was labelled "mortgage apartheid" last night by Frank Conway of the Irish Mortgage Corporation.

Mr Conway said standard variable rates would rise again in the next few months because of losses being suffered by lenders and because of high borrowing costs for banks and building societies.

He added that a rise in ECB rates would have allowed lenders to camouflage rises in standard variable rates.

Unilateral

Rachel Doyle of the Professional Insurance Brokers' Association said that eight out of 10 mortgages issued in the second half of last year were variable, leaving householders vulnerable to unilateral rate hikes being imposed by banks.

Yesterday, the ECB left its key interest rate at 1pc for the 16th month in a row.

ECB president Jean-Claude Trichet said that rates were "appropriate", signalling no immediate plan to raise them.

Economists said that the indications from Mr Trichet were that a rise in eurozone rates was now further away than before.

Goodbody economist Dermot O'Leary said the message from yesterday's meeting of the ECB was that a rate rise was unlikely before 2012.

He added that money markets were not pricing in a rise in rates before then.

Mr O'Leary said that eurozone banks were still in a fragile state and continued to need financial support from the ECB.

The moves by a number of European countries to impose cutbacks in expenditure would dampen down the prospects for economic growth.

This in turn would remove the risk of inflation rising sharply in the 16-member eurozone.

The ECB's main concern tends to be the threat of inflation, with rate rises used to suppress that.

The Irish Independent also reports that toxic loan agency NAMA is expected to have the final say on whether the proposed "ghost" headquarters of disgraced Anglo Irish Bank is finished or sold off.

The eight-storey shell building, part of a package of developments now controlled by NAMA, was used as security on loans that NAMA acquired from developer Liam Carroll. NAMA has a €5bn pot, which it can invest in unfinished projects.

The agency must now decide whether it can get a better deal for taxpayers by finishing the building in the Dublin docklands and selling it on, or offering it for sale in its current state.

The value is likely to increase significantly as a result of yesterday's planning approval by An Bord Pleanala for the project to be completed.

There is no anchor tenant, as Anglo pulled out of the agreement to occupy the building last February. A High Court action was taken by rival developer Sean Dunne, who owns nearby properties. Work on the project was halted after the High Court quashed planning permission fast-tracked by the Dublin Docklands Development Association (DDDA).

A "secret" agreement was reached, whereby permission would be granted to Mr Carroll's company for a 16-storey building that was not allowed in the North Lotts area at that time, the DDDA has admitted.

The authority has maintained that the board, which was responsible for granting planning permission, was not aware of the details of the agreement by a number of its executives.

The former Anglo Irish Bank chairman Sean FitzPatrick sat on the board of the DDDA.

The unfinished shell building has become an iconic image of the collapse of the Irish property market.

The long-running appeals and court cases mean the eye-sore building has been left unfinished on Dublin's quays for several years.

In its decision yesterday, An Bord Pleanala said the retention and completion of the building would be compatible with existing and permitted development in the area.

It would not seriously damage the local visual amenities and would be acceptable in terms of traffic, the authority said.

It is now open to Mr Dunne to bring a judicial review of the latest planning decision if he chooses to do so.

The Irish Times reports that European Central Bank (ECB) chief Jean-Claude Trichet has said the Irish Government alone is responsible for dealing with the mounting costs of supporting the nationalised Anglo Irish Bank.

As the Coalition faces into a difficult budget estimates process against the backdrop of worsening economic data, Mr Trichet also said Ministers should continue to make “appropriate” moves to stabilise the economy.

He declined to discuss escalating concern that the rising cost of the Anglo bailout, which stands at €25 billion, was creating an intolerable burden on taxpayers and undermining market confidence in the Government’s overall economic plan.

The European Commission is examining a new restructuring plan for Anglo, scrutiny which coincides with a credit rating downgrade on Irish debt by Standard Poor’s and a rise in the State’s borrowing costs.

“If I’m not mistaken it is a bank which is owned by the Government . . . so it’s a responsibility of the Government of Ireland and of the Irish authorities in general to take the appropriate decisions,” Mr Trichet told reporters. “I would say that it is the responsibility of the Irish Government and of the Irish authorities in general to deal with their banks. That is a responsibility that lies very much in Dublin.

“I have confidence that they will manage this difficult issue as well as possible as they did in the past.”

Mr Trichet was speaking as the bank’s governing council extended emergency liquidity measures for banks into 2011 and held its main interest rate at a record low of 1 per cent for the 17th consecutive month.

He offered no comment on an assertion by Irish Central Bank governor Patrick Honohan that Irish borrowing costs were “ridiculous” and declined to say whether he agreed with the assessment from the National Treasury Management Agency that the SP downgrade stemmed from a “flawed” analysis.

It was his practice, he said, not to comment on market movements.

“As regards the overall Irish strategy, I would encourage Ireland to continue to take the appropriate decisions that they took at the very beginning of the crisis with the frontloading decisions that are very important in all domains and of course including in the fiscal domain which remains very important.”

The ECB president’s comments came as the latest exchequer figures showed the Government’s tax revenues continue to fall. The State has collected €18.9 billion in taxes in the first eight months of the year, which compares to €20.8 billion in the same period last year, a drop of 9 per cent. The Department of Finance said the decline had been anticipated in the monthly target for August.

Mr Trichet said a double-dip recession in Europe was not “in the cards” but said risks to the inflation outlook were on the upside. The recovery would continue “at a moderate pace with uncertainty still prevailing”.

The euro traded near its strongest level in a fortnight against the dollar, following the bank’s monthly rate-setting meeting. Given stronger than expected data about the recovery in the euro zone at large, ECB staff raised growth forecasts for the common currency area for this year and next. Nevertheless, the decision to extend emergency lending operations “for as long as necessary” indicates the bank remains in crisis.

The ECB will continue to offer banks unlimited one-week and one-month loans until at least January 18th, extending by three months operations scheduled to unwind next month. The bank also said it will offer three-month refinancing loans in October, November and December at interest rates linked to the average benchmark ECB rate over the lifetime of the loans in question.

The Irish Times also reports that about 20 multinational companies have relocated their corporate headquarters to Ireland over the past year because they are able to pay “little or no tax” here, according to the Revenue Commissioners.

The firms, which are mostly US- and UK-owned, have been moving their main holding companies away from places like Bermuda and the Cayman Islands because of plans by a number of governments to clamp down on tax havens.

Internal briefing material drawn up by Revenue officials shows there has been a significant rise in firms transferring the residence of their main holding companies to Ireland or considering doing so. The very limited amount of tax paid by some of these firms indicates they do not have any meaningful presence here in terms of investment or jobs.

The benefits for firms who relocate their headquarters to Ireland – a practice known as corporate inversion – are significant. In addition to low corporation tax rates, they can benefit from the fact capital gains from the disposal of subsidiaries are not taxed. Unlike most other countries, Ireland taxes the dividends of a multinational firm’s holding company only, not its global profits.

They also have the opportunity to write off the cost of acquiring intellectual property assets against taxable profits for 15 years. Plans by the US government to clamp down on the use of tax havens by US firms, as well as uncertainty over the issue in the UK, have led to a rise in the popularity of Ireland as a corporate base.

The Revenue documents state US holding companies previously resident in tax havens such as Bermuda or the Caymans are tending to relocate to either Ireland or Switzerland because they have tax treaty networks. Similarly, it says, there has been in increase in UK firms relocating here.

“These holding companies pay little or no tax in Ireland,” the Revenue documentation states.

“However, the MNEs (multi-national enterprises) in some cases have distribution, services and/or production operations here. Furthermore, the location of the holding company in Ireland brings the country and its economic attractions to the attention of the directors, ” it says.

Some of firms that announced they were relocating their corporate headquarters to Ireland for tax reasons over the past year include Lloyd’s of London insurer Beazley; the Willis Group insurance company; industrial technology firm Ingersoll-Rand; and medical giant Covidien.

The Irish Examiner reports that figures released today show that the sales of Jameson Whiskey, made in Midleton, continue to soar worldwide.

Sales increased by 12% in the 12 months to the end of June.

This was double-digit growth, matched only by sales of Martell brandy, which also recorded a similar growth.

But it is believed that Jameson sales dipped here in the third quarter of the year, but on a worldwide basis continued to show strong growth.

The whiskey sold about 2.7 million cases in the 12 months to the end of June 2009. The plan is now to raise that figure to three million cases.

The whiskey brand and Martell are amongst the company’s top 14 brands, identified by the company as the main drivers of its worldwide success.

The firm is now planning to build a new warehouse at Dungourney to cater for its extra storage needs because of the success of the brand.

The land for the site was previously owned by Coillte.

Pernod Ricard, which bought Irish Distillers in 1988, said that group operating profit for the 12 months was €1.795bn.

Also today fresh fruit and vegetable importer Total Produce said that profits before tax rose by 5.5% to €21.7m for the first half of the year.

Revenues at the group rose by 1.7% for the six-month period to June to €1.33bn.

It was a sluggish start to the year, said chairman Carl McCann who described the performance as solid.

“After a slow start to the year due to unusually cold weather throughout Europe, demand for the group’s produce recovered, with it also benefiting from favourable currency translation movements,” he said.

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