Ireland’s borrowing costs are continuing to rise, after the Government received approval yesterday to increase the amount of capital it can inject into Anglo Irish Bank.
The premium – or spread – that investors demand for holding 10-year Irish bonds, instead of benchmark German securities, has widened to 297 basis points today. The spread has now pulled out by more than 50 basis points this week.
The yield on 10-year Irish bonds jumped to 5.43 per cent today.
"The uncertainty surrounding the exact amount of the transfer into Anglo is weighing on the Irish sovereign," stockbroking firm NCB said in its morning note.