The Irish Independent reports that mortgage and other borrowing costs will rise today but there are growing hopes there will only be one more hike next year.

The Irish Independent also reports that the Budget may have outlined new measures to help 125,000 first-time buyers, but Finance Minister Brian Cowen still came under fire for failing to reform stamp duty.

The Irish Times reports that the Dublin Airport Authority has sold its stake in Hamburg airport, the fourth largest in Germany, for more than €30 million to a German building company.

As airport valuations achieve new highs, the DAA's international arm, Aer Rianta International, decided to sell the stake, believed to be approximately 3 per cent, to German construction group Hochtief. The purchase price was not disclosed and the legal elements of the transaction will not be completed until early in the new year.

Hochtief has embarked in recent years on a strategy of buying airports and is already a substantial shareholder in Hamburg.

It is also a shareholder, with the DAA, in Düsseldorf airport as well as holding stakes in airports in Tirana, Budapest and the Middle East.

The DAA declined to comment last night on the sale, but sources maintained that the transaction would not trigger a disposal of its other holdings. It owns a range of duty-free shops and retail outlets and has a 20 per cent stake in Düsseldorf and a 24 per cent stake in Birmingham.

Ryanair, Europe's largest low-cost airline, has called on the DAA to sell all its international holdings and use the proceeds to fund new infrastructure like the second terminal and Pier D.

However, DAA chairman Gary McGann has rejected this idea and said the company would not engage in what he has described as a "fire sale".

It is understood the Hamburg transaction was triggered after Hochtief exercised a long-standing option to buy out the Aer Rianta International stake. Throughout Europe, airports have been managing to achieve unprecedented valuations based on rising traffic figures and the growth of low-cost airlines. Dermot Desmond, who owns London City Airport, is set to net €1.1 billion from its sale.

Grupo Ferrovial, the Spanish construction firm, bought the major UK airport operator BAA back in August for $19 billion (€14.3 billion). BAA operates major global hubs such as Heathrow. Ferrovial has since been selling other airport stakes it owns to pay down debt.

2005 was a successful financial year for Hamburg airport. The number of passengers grew at an above average rate, turnover performed well and earnings remained stable. Passenger volume grew by 7.9 per cent to approximately 10.7 million.

The last time Hamburg airport reported growth at this level was 15 years ago. Turnover grew by 2.4 per cent to €203.4 million.

Meanwhile, Ryanair has indicated to the European Commission it would be prepared to give up some slots at eight airports - Heathrow, Stansted, Frankfurt, Paris, Milan, Rome, Bratislava and Barcelona - as part of the terms of any acquisition of Aer Lingus.

The Irish Times also reports that taxpayers will share a €1.25 billion personal tax package next year, following Brian Cowen's decision to increase personal tax credits, widen the standard rate tax band and cut the top rate of tax by 1 per cent.

In a Budget that Bank of Ireland chief economist Dan McLaughlin described as including "something for everyone", the personal tax credit was increased by €130 to €1,760 for single people and by €260 to €3,520 for married couples, while the PAYE employee tax credit will go up by €270 to €1,760 next year.

Figures from PricewaterhouseCoopers show that high-income earners will receive the biggest increases in their monthly pay packets as a result of the Budget.

A single worker earning €150,000 a year will add around €138 a month to their take-home pay, while the same worker earning a salary of €40,000 will take home an extra €75 a month.

In last year's budget, it was workers earning about €40,000 who took home the biggest increases in their take-home pay. But the decision to cut the top rate of income tax from 42 per cent to 41 per cent means that it is the highest-income workers who will do the best out of Budget 2007.

However, higher earners' satisfaction will have been partially dampened by an increase in the health levy rate from 2 per cent to 2.5 per cent for people earning more than €100,100 a year.

Mortgage holders have also done well out of Mr Cowen's package. Most first-time buyers will be able to add €66 to their monthly disposable income as a result of the doubling of the ceiling for mortgage interest relief from €4,000 to €8,000 a year for a single person and to €16,000 for married couples. But about half of this increase will be wiped out for typical first-time buyers following today's expected hike in interest rates by the European Central Bank.

As a result of yesterday's Budget, workers will not enter the tax net or start paying PRSI until they begin to earn €17,600 a year, which is equivalent to a rate of €8.65 an hour. Mr Cowen said these measures would remove around 88,000 people from the tax net, including all those on the minimum wage.

About 846,000 people - two out of every five earners - will be outside the tax net in 2007 compared with a third of workers, some 677,000 people, in 2004.

Mr Cowen announced a €2,000 increase in the standard rate income tax band, a measure that he said would ensure that workers earning the average industrial wage will not be liable to tax at the higher rate. This means that a single person can now earn €34,000 before they start paying tax at the top rate. Single-income married couples will be taxed at the standard rate of 20 per cent on the first €43,000 of their income, also up €2,000 on last year.

People aged 65 and over will receive an increase in the age tax exemption limit, which will rise from €17,000 to €19,000 for single people and from €34,000 to €38,000 for married couples.

The Irish Examiner reports that the lifespan of Business Expansions Schemes (BES) has been extended for a further seven years.

Finance Minister Brian Cowen said he decided to extend the BES, which were due to expire at the end of the year, after recommendations from the Small Business Forum.

Mr Cowen has also increased the limit that can be raised through a BES from €1 million to €2m and upped the annual limit on BES investment per individual from €31,750 to €150,000.

The Seed Capital Scheme is also being renewed for a further seven years.

The estimated cost of extending the BES and Seed Capital Scheme is €25 million and will require the approval of the European Commission as they are considered State aid.

Irish Exporters Association chief executive John Whelan said the increase of the individual investment limit to €150,000 should go a long way to encouraging private individuals into investing in the export sector.

The Institute of Chartered Accountants in Ireland also welcomed the move, though its taxation director Brian Keegan said it should not contribute to the debate about tax paid by high earning individuals as it “seems that BES will remain limited under the overall cap on reliefs availed of by individuals in any one tax year.”

But Pat Cullen, a partner with Deloitte, said the ceiling should have been raised to €25 million, which would allow companies to make the investments required to enable them develop and compete internationally.

Ernst & Young tax partner PJ Henehan said: “The extension of the relief for a further seven years and the increase in the amount of funding which companies can raise from BES schemes are welcome. Whether these changes achieve the objective of freeing up more risk capital for small businesses is questionable in light of the 2006 Finance Act cap on investment reliefs available for high income earners.”

The Financial Times reports that BSkyB and Google have agreed an advertising alliance.

The partnership will at first see Google provide its user-generated video, e-mail, search and targeted advertising tools to customers of BSkyB’s five-month-old broadband internet service – the first licensing of the video tools Google bought when it acquired YouTube for $1.65bn in October.

The companies plan to extend the partnership to BSkyB’s core television platform, however, by replacing traditional 30-second television adverts with targeted commercials stored on hard drives in BSkyB’s set-top boxes.

Google’s AdSense technology, which brings up adverts relevant to search terms of users, would be deployed alongside BSkyB’s knowledge of its customers’ profiles and interests.

“This is a really, really big deal for us,” said Eric Schmidt, Google’s chairman and chief executive. “If it works, it will become our most lucrative deal from the get-go.”

Neither company would confirm the financial terms but BSkyB is thought to be in position to take the lion’s share of the revenues.

James Murdoch, BSkyB chief executive, said he was not changing the company’s earnings guidance to investors but Mr Schmidt said: “It should be net positive for Sky.” Mr Murdoch said the “multi-year” alliance was structured as a revenue share. BSkyB would contribute to the “substantial engineering resources” Google would commit to the alliance and towards the cost of the storage and capacity consumed by its customers’ activities.

Mr Schmidt said Google had chosen the UK as a “test bed” because of fast broadband speeds and high broadband penetration. “Britain is ahead. They have so much bandwidth it changes the definition of how people use Google.” The UK market, already 15 to 16 per cent of Google’s revenues, was “exploding”.

For BSkyB, the alliance should help distinguish its service from competitors in the UK’s broadband market and expand its small advertising revenues.

Mr Murdoch said BSkyB expected broadband to provide income from communications including internet phone calls; subscription revenues; and services including advertising.

FT VIEW

The alliance comes as traditional broadcasters are looking for ways to regain younger audiences lost to social networking and user-generated content sites, and fits with BSkyB’s previous moves to differentiate itself from rivals such as NTL and BT Group in the fast-converging media and communications industry.

The fact that no figures have been disclosed may be significant. BSkyB has no doubt paid for the privilege of having Google handle the “back end” of email, search and video management, but the revenues may be small at first. BSkyB will feel it has struck a marketing coup, however.

The FT also reports that Gordon Brown on Wednesday raised taxes by £2bn on companies and air passengers to help fill an unexpected hole in public finances that constrained his attempt to make education the battleground at the next election.

Despite strong economic growth forecasts, the chancellor’s room for manoeuvre in almost certainly his last pre-Budget report was limited by tight future public spending plans and disappointing revenue forecasts.

Mr Brown signalled education would be the “number one priority” for his premiership and announced allocations for capital spending on schools up to 2011. Yet such was the squeeze on public finances over the next three years that the growth in education capital investment will actually fall from 11.1 per cent over the current spending round to 4.1 per cent for the three years after 2008. However, the chancellor made clear he saw public investment – especially in education – as the key dividing line with David Cameron’s Conservatives.

“The new priority is world-leading investments that will move Britain sustainably ahead of our competitors – the road and rail networks, the affordable housing, the advanced medicine and science and the schools and colleges of the future.”

Alongside education the main theme of the statement was the need to improve skills and boost infrastructure to meet the competitive threat from China and India. “China alone is manufacturing half the world’s computers, half the world’s clothes, more than half the world’s digital electronics and this Christmas, more than 75 per cent of children’s toys,” Mr Brown said.

He gave his backing to proposals for an independent planning body to adjudicate on major infrastructure projects, ending the lengthy delays to important strategic developments.

The most important piece of good news for the chancellor came when he raised the growth forecast for this year to 2.75 per cent and increased his estimate of the long-term sustainable rate of growth in future.

The pre-Budget report conceded that disappointing North Sea tax revenues and higher than planned increases in social security expenditure pushed the budget deficit £5bn a year further into the red from next April.

Mr Brown doubled air passenger duty from the beginning of February to raise £1bn a year. The tax on European economy class flights will rise to £10, long haul economy passengers will have to pay £40 and those in other classes will pay £80. Fuel duty was increased in line with inflation by 1.25p a litre.

Companies bore the brunt of the chancellor’s other tax-raising measures with further curbs on tax avoidance and action to reduce the impact of European Court rulings on government revenues. Though the independent reports commissioned by the chancellor were well received, business organisations saw the pre-Budget report as a lost opportunity.

Richard Lambert, director general of the CBI employers’ organisation, said: “On the critical issue of tax competitiveness, there was silence.” For the Conservatives, George Osborne, shadow chancellor, mocked Mr Brown’s aim of refreshing the Labour government, saying he was equally responsible for the “failures” of the Blair years.

The New York Times reports that after air traffic fell off sharply following the Sept. 11, 2001, attacks, the Boeing 747, the hump-backed giant of the skies, appeared to have run out of lives.

The plane — the first of which was flown in 1970 by Pan Am after being christened by the first lady, Pat Nixon — was no longer in strong demand, as the world seemed to be moving to smaller, more fuel-efficient planes. And the new double-decker A380 from Airbus, Boeing’s archrival, had captured the industry’s imagination, even though it was years from being built.

The 747 “was on a heart-lung machine,” Howard Rubel, an aviation analyst at Jefferies & Company, recalled. “It looked like Boeing was about to shut it down.”

But a funny thing happened to the 747 on the way to the graveyard: it found a new tailwind, and a strong one at that.

Demand is growing for the new 747-8 Intercontinental, which was introduced a year ago. Boeing now has 73 orders for the plane after its latest lift yesterday from Lufthansa, the big German carrier, which announced it was placing a $5.5 billion order for 20 747-8s, and took options to buy 20 more.

“It’s taken us time to evolve the plane,” said Larry S. Dickenson, Boeing’s vice president for sales, at a news conference yesterday. “We think we have a winner.”

This reversal of fortune comes as Airbus’s superjumbo A380 has stumbled, falling two years behind its delivery schedule amid persistent wiring problems and a management shake-up at the company. While Boeing takes pains to say that the two planes are not head-to-head competitors, the industry generally sees them that way. They are the only two planes in the “very large” category: The 747-8 is designed to carry up to 467 passengers, while the A380 can carry up to 555.

In large part, the 747’s new lease on life is owed to global trade. Until the Lufthansa deal was announced, all 747-8 orders had been for the freighter version of the plane. Even the initial orders for the latest model were for air freighters, an unusual move in an industry that likes to kick off new models with orders from high-profile passenger carriers.

But, technological advances, particularly next-generation fuel-efficient engines, improved the economics of operating a four-engine passenger plane like the 747.

“The new 747 is an inexpensive way for Boeing to capture some passenger orders, a lot of cargo orders and make a fair amount of money because of the Airbus 380 hiccup,” said Jon B. Kutler, chief executive of Admiralty Partners, a private investment firm in Santa Monica, Calif., that specializes in aerospace.

The 747-8 is even being sold and outfitted by Boeing as a private jet much like Air Force One, which is a 747. Each plane carries a list price of about $275 million. Boeing will not identify the customers, but many in the aviation world say the orders are probably coming from people in the Middle East who are flush with oil riches. They are historically big buyers of Boeing jets for personal use.

Of course, these events have not gone unnoticed at Airbus, which has lost some freighter orders for its A380 to Boeing in recent weeks. Allan McArtor, chairman of Airbus North America, called the new 747-8 a brand-new Edsel, the famous new-car failure of the late 1950s.

“The 747 is on its last legs,” Mr. McArtor said in an interview. “It doesn’t have any legs to stand on. Boeing is trying to breathe life into a 1960s-era design. There is only so much you can do with a plane.”

He added: “But it is irritating. Boeing is getting orders only because of our inability to meet demand. Had we not stumbled with the A380, there would not be orders like the Lufthansa order for the 747-8.”

Boeing executives, not surprisingly, have a different view of the plane. “The 747 is a plane that is tough to beat,” said Dan Mooney, Boeing’s vice president for the 747 program. “The 747 will do what our customers are looking forward to. We now have a plane that works for them.”

Today’s 747, of course, is not the same as the one flown in the 1970s. The first version, the 747-100, featured a piano bar on the upper deck. Today’s 747-8, which will be delivered in 2009, is longer, faster and will carry over 100 more passengers than earlier models.

At Mach 0.855, about 570 miles per hour, the 747-8 will be the fastest commercial plane in the sky. It can also fly 8,000 nautical miles nonstop, compared with 4,500 nautical miles for the original version. Boeing has produced a total of 1,379 747s to date and has a backlog of 91 orders

“The 747 has turned into the Energizer bunny of airplanes,” said Byron Callan, an aviation analyst with Prudential Equities Securities.

But the plane fell into a steep decline in the last few years. Once Airbus announced in 2000 that it would build the A380, it created the industry buzz that the 747 once enjoyed. In 1990, Boeing had 122 orders for the plane. By 2003, it had only four.

When Airbus announced the A380, Boeing looked flat-footed. For years, it appeared to dither about the future of the 747. It ordered up a number of 747-X studies of an advanced version of the plane, but came to no conclusion.

But the dithering paid off. As time marched on, so did technology. And when Boeing shifted its emphasis into developing its new 787 Dreamliner, a wide-body midsize passenger plane, many of the technologies it pioneered for that plane could be adapted to the 747, including the fuel-efficient engines developed for the 787 and a new wing design that could stretch its flying range.

“We were challenged,” said Mr. Mooney, head of Boeing’s 747 program. “We could stretch the plane, but not get range. We could get range, but not add capacity. The real breakthrough was the new 787 engines. That was the last piece of the puzzle allowing us to add additional seats as well as increase the flying range. That automatically allowed our customers to get more revenues from the plane.”

Even more important to the longevity of the 747 was a design decision made in the 1960s, when the 747 was still on the drawing board.

While the plane was envisioned as a passenger jet, it was also designed to be easily adapted to a freighter model. The first freighter — complete with a nose that opened up for big cargo — entered the market in 1972. But, at the time, there was scant interest in this type of craft.

That changed in the late 1970s, when passenger demand hit a cyclical low and airlines found that the 747 was too big for their needs. In response, Boeing came up with the idea of helping airlines convert their 747s to freighters to sell them.

“The conversion program came out of necessity,” said Ned Laird, managing director of the Air Cargo Management Group, a consulting firm and a former Boeing executive who worked on the conversion program. “Freight companies that could not afford a new 747 could purchase a surplus 747 at a favorable price.”

The conversion program helped eliminate what otherwise would have been a glut of planes. At the moment, 747 freighters now dominate the air cargo market. Mr. Laird estimates that measured by ton-miles carried, the 747 represents about 60 percent of the freighter market, which has revenue of about $60 billion a year.

As manufacturing increasingly moves to Asia and worldwide commerce increases, the cargo market is growing at a faster rate than the passenger market — about 6 percent a year, compared with passenger growth of about 4 percent, according to Air Cargo Management. (That said, the passenger market is about three times the size of the freighter market, with revenue of $185 billion last year.)

At the moment, there are 481 747 freighters in use. This compares with 353 in 2000. While there are many smaller cargo planes — and the combined total of all them exceeds the number of 747 freighters in the air — the 747 is the only big cargo plane available and is the only plane that can be used for some large loads.

One of Boeing’s big coups was to lure Federal Express away from a freighter version of the Airbus A380. Federal Express decided to go with Boeing — it ordered 15 smaller Boeing 777s — because of the delivery delays in the A380. Currently, Airbus has only one main customer, United Parcel Service, for its A380 freighter. .

Boeing has high hopes that it may be able to peel away some passenger orders from Airbus, as well. Mr. Mooney, the 747 program manager, predicted that, over time, the bulk of 747-8s would be sold to passenger carriers.

Airlines have already hinted that more 747-8 passenger orders might be in the offing. Etihad Airlines, the national carrier for the United Arab Emirates and an A380 customer, said it might consider a 747-8.

Tim Clark, president of Emirates Airlines, also an A380 customer, said last October that the airline was considering the 747-8. Another possible buyer is British Airways, whose chief executive, Willie Walsh, complained recently that the A380 is “too big.”

In a matter of just a few years, the market positions of the A380 and the 747 have switched. The A380 has gone from being the plane of the future to the one in trouble. The 747, meanwhile, moved from being an also-ran to a real competitor.

“One would have never thought that Boeing could have gotten a lot of orders for the 747,” said Paul Nisbet, an aerospace analyst at JSA Research in Newport, R.I. “But they will turn out enough to give Airbus some real heartburn with the A380.”

In the NYT, Austan Goolsbee, a professor of economics at the University of Chicago Graduate School of Business, writes that when Matt Lauer declared on the “Today” show last week that NBC would start referring to the conflict in Iraq as a “civil war,” he inadvertently started his own civil war within the news media. Fox News refused to follow suit, saying that non-Iraqis were involved in the fighting, “and that makes it something different.” Accusations of partisanship arose all around. Yet newspapers around the country have been making decisions on this matter for months. The Los Angeles Times and The Christian Science Monitor have somewhat officially termed the conflict a civil war; The Washington Post has not.

Any politician will tell you that sometimes what we call things is the most political decision of all. Political consultants like Frank Luntz, a Republican, have become legendary for their way of spinning language to partisan advantage: ”death tax” instead of “estate tax,” “war on terror” instead of “war in Iraq.” But most people expect spin from politicians. When they perceive partisan slant in the news itself, they typically interpret it as evidence of underlying bias by reporters or media owners.

But one of the most interesting things coming out of research on the economics of the media industry has been the notion that media slant may simply reflect business rather than politics.

New research by two University of Chicago economists, Matthew Gentzkow and Jesse M. Shapiro, entitled “What Drives Media Slant? Evidence From U.S. Daily Newspapers” (www.nber.org/papers/w12707.pdf) compiles some compelling and altogether unusual data to answer the question.

Dr. Gentzkow and Dr. Shapiro started in the world of the political. They parsed the words of politicians — all the words — from the 2005 Congressional Record. They found the 1,000 most partisan phrases uttered in the year. They measured this by comparing how frequently a phrase was used by one side or the other.

In 2005, phrases like “death tax,” “illegal aliens,” “Terri Schiavo,” and “nuclear power” came mostly from Republicans. Phrases like “minimum wage,” “public broadcasting,” “middle class” and “oil companies” came mostly from Democrats. Using those phrases, the two economists made a simple index of partisanship that comported nicely with standard measures like a politician’s score on the Americans for Democratic Action ideological scale.

The study then analyzed 417 newspapers in the United States (accounting for some 70 percent of total newspaper circulation) as if they were politicians. The researchers measured, for example, all the times in articles about Social Security that a newspaper referred to “personal accounts” (Republican) or to “private accounts” (Democratic). Their measure of partisan slant came only from the news coverage. They did not include anything from the editorial page.

The index matched most popular perceptions of newspaper partisanship. Papers like The Washington Times or The Deseret Morning News of Salt Lake City used Republican phrases while papers like The San Francisco Chronicle and The Boston Globe used Democratic ones.

But more important, once the authors had this measure, they showed that the main driver of any slant was the newspaper’s audience, not bias by the newspaper’s owner.

A comparison of circulation data (per capita) to the ratio of Republican to Democratic campaign contributions by ZIP code showed that circulation was strongly related to whether the newspaper matched the readers’ own ideology.

Their measure indicates that The Los Angeles Times, for example, is a liberal paper. Its circulation suffers in Southern California ZIP codes where donations to Republicans are especially high.

The authors calculated the ideal partisan slant for each paper, if all it cared about was getting readers, and they found that it looked almost precisely like the one for the actual newspaper. As Dr. Shapiro put it in an interview, “The data suggest that newspapers are targeting their political slant to their customers’ demand and choosing the amount of slant that will maximize their sales.”

On one hand that sounds a little mercenary. On the other hand, there is certainly good news in the finding. If slant comes from customers, then the views of the owners and the reporters do not matter. We do not need to fear that some partisan billionaire will buy up newspapers and use them for propaganda.

Indeed, the study found that the views of the owner had no significant effect on the slant of the newspaper. The partisanship of corporate donations from the owner had no bearing on the slant of the news coverage in the paper. The slant of a newspaper group’s other newspapers had no bearing, either. The New York Times Company’s newspaper in Spartanburg, S.C., for example, had the same slant as other newspapers in South Carolina that the company did not own.

So although politicians from both sides tend to accuse the news media of partisanship and negativity, the data suggests that they ought to blame the public. The papers basically reflect what their readers want to hear.

No doubt, the battles over partisan language will continue. But to explain it, you need not try to find the inner politics of Matt Lauer, the ultimate ownership of the news media or even the facts on the ground in Iraq. A simpler approach would take a three-word phrase that never showed up on the partisan index: follow the money.