THE latest edition of the JP Morgan Index shows a sharp fall in investors' expectations of Ireland as a member of the initial group moving to monetary union. Ireland's rating fell to just 41 per cent yesterday, from 58 per cent a week ago. One month previously Ireland was rated with a 70 per cent chance of participating. Ireland was the only country which suffered a serious downgrading over the past week.
A spokesman for JP Morgan said it was difficult to point to any one reason for the fall in investors' expectations. "It is a combination of factors from political instability to general monetary union scepticism," he said.
Irish bond markets have under performed in nearly all other European markets this week as investors worry that another interest rate rise may be on the way.
International investors have been selling Irish bonds as they worry over interest rates and that a minority government may be less able to participate in EMU.
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