ECONOMY

In Brief

Total credit expansion picks up to 18 pct in Oct Greece’s total credit expansion picked up to an 18 percent annual pace in October from a downward revised 17.9 percent in September, Bank of Greece provisional data showed yesterday. «Credit growth to the private sector remained at high levels, reflecting strong lending to business. Credit to households showed a deceleration, with a more marked slowdown in mortgages where the pace dropped to a 10-year low,» said National Bank economist Nicholas Magginas. «Credit expansion to the private sector is expected to slow in the coming months. The European Central Bank’s looser monetary stance should cushion the fall in demand. (Reuters) National Bank cuts rates, effective next month National Bank, Greece’s largest lender, will cut interest rates on small business loans and mortgages as of January, it said yesterday. The lender said it will reduce interest rates on the loans offered to small businesses by 0.50 percent, in line with a reduction in variable rates applied to home loans. Interest paid on savings and payroll deposit accounts will range between 0.10 to 0.25 percent, depending on the amount, it said. OLTH pullout State-controlled Thessaloniki Port Authority (OLTH) said yesterday a joint venture consisting of Hutchison Port Holdings, HPI SARL and Alapis Holding had withdrawn its interest to run container operations at Greece’s second largest harbor. The two sides were at the stage of drafting the relevant contract after the joint venture had been named the provisional winner of the tender in August, said OLTH in a bourse filing, without providing any further details. Sentiment declines Cyprus business and consumer sentiment declined sharply in December, reflecting a downturn in the retail sector and downbeat consumers, a survey showed yesterday. The economic sentiment indicator for December fell to 69.2, falling 8.4 points compared to November. «A significant deterioration in the business climate was seen in December 2008, particularly in retail trade. There are expectations of a worsening job market in the services and construction sector,» the survey released by the University of Cyprus said. A notable decline was registered in sentiment in the retail trade sector, with outlets reporting a drop in sales in recent months, and expectations of lower sales in the coming months. (Reuters) Decoupling neighbors The UK economy is increasingly in step with that of the euro region, even as it rejects the single currency that binds together 15 countries on mainland Europe, the ZEW center for European economic research said. «Even as the country refuses the most important integration step, the introduction of the euro, it converged toward the eurozone in the past years, at least economically,» ZEW said in a report published yesterday. Due to its foreign trade relations, the UK «can’t disentangle from the economic dynamics in the eurozone,» ZEW economist Marcus Kappler said. At the same time, the cycles of economies in the periphery, such as Portugal and Greece, are decoupling from their neighbors in the common currency area, ZEW added. «As these countries are less industrialized, their trade relations to other euro-region countries are weaker,» the institute said. (Bloomberg)