Opening Bell: Budget watchdog worried, Aldi's Irish expansion, sterling drops again

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An independent budget watchdog has warned that Budget 2017 is set to breach key EU rules and goes beyond what is prudent.

Professor John McHale, chairman of the Fiscal Advisory Council, voiced his concern last night that when the package was combined with earlier additional spending commitments, the total increase in tax cuts and spending for next year would be €3 billion more than 2015.

According to the Irish Times, McHale fears that the Government will now miss a key borrowing target this year, the so-called structural balance.

He also believes it is set to miss its overall spending limit in 2017.

Last month, Prof McHale had told the Dáil budget oversight that the package, then estimated at €1bn, was “at the limit of the range of prudent policies”. The ultimate measures announced yesterday will cost the Exchequer an extra €1.3bn.

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Michael O'Leary has said that Ryanair would provide a third terminal at Dublin Airport for €200 million.

Speaking at a gathering that included Government ministers, the Ryanair chief executive argued that, while Dublin will need the terminal, the State-owned daa should not have any involvement in it.

His comments at a Fine Gael business breakfast last week echoed his proposals before the daa built Dublin Airport's second terminal.

O'Leary also repeated Ryanair's position that airlines should pay no more than the collective €250m agreed two years ago for Dublin's proposed second runway.

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Aldi has posted major revenue growth in Ireland and the UK for 2015 as the German discount retail giant continued its expansion into both markets.

Revenues for the countries climbed from £6.89 billion (€7.65bn) to £7.7bn (€8.55bn), with the numbers employed by the group up 4,000.

Despite this, pre-tax profits were down 14.5% to £212m (€234m). 

Aldi does not disclose its sales or profits in Ireland. It announced the creation of a further 400 jobs here last year.

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Sterling hit a seven-year low on Tuesday as it plunged 1.2% against the euro in late trading.

The euro has climbed more than 19% against sterling since the the UK's decision to leave the European Union in June.

Sterling also hit a new 31-year low against the dollar, dropping nearly 2% to $1.209 after European markets closed.