They are all coming down one way or the other

This week was a quite interesting and eventful one. Not only that Markus has been travelling a lot again, being in Frankfurt on Monday and in London from Tuesday night until Friday, we have also seen a big 100bps rate cut by the Bank of England, a surprising 175bps shoved off the interest rates in Sweden and (finally) 75 bps reduction by the ECB. Especially the latter move has been long awaited as Mr. Trichet has been focussing on inflation by far too long in Markus’ opinion. The move came late. Probably too late to have a real impact and therefore more cuts are likely. In the US they are even talking about interest rates of 0% (just like we have seen in Japan a few years ago). From an Austrian perspective the sale of Austrian Airlines to German Lufthansa, unless the EU commission steps in and prevents the transaction, has been another big event. This seems to be the best solution for both Austrian as well as Vienna International Airport. Markus is definitely happy that Lufthansa is going to be the new owner and not Air France/KLM.

During the trip to London one thing became quite obvious> the city is not expensive anymore for us Europeans! When Markus started working in London back in 2001 the EUR/GBP exchange rate was at 1,70 (1 GBP = 1,7 EUR) while now the FX rate is at 1,16! That means that for Europeans London suddenly feels much cheaper and certain goods are now less expensive on the island than in Vienna or any other European city. So for all of you who have not been to London or the United Kingdom: now is a really good time to fly over and do some Christmas shopping! And all the folks who haven’t been by River Thames for quite a while, pack your stuff, book a flight on www.aua.com and off you go. Shopping never has been so cheap and by now you can even get flats at bargain prices as the credit crunch has hit the UK economy and housing market severely as the headlines of daily newspapers proclaim almost daily.

Europe's financial centre is getting cheaper by the minute

We are yet again pretty much booked out for this year, but are planning a London weekend for Q1 next year in the hope that the prices are not taking off too fast. But first of all we enjoy the long weekend in Vienna and will use Monday for some Christmas shopping.

Kerstin & Markus