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Dublin: 7 °C Thursday 24 April, 2014

Bailout fears take their toll: Ireland’s bonds hit 9%

Fears over the future of Ireland’s economy, and whether a bailout can be secured, sends borrowing costs to new highs.

THE COST OF BORROWING to the Irish state has reached an all-time record high this morning, with the interest rate being asked of the government for ten-year loans reaching 9% for the first time.

The price hit its record for the Euro era shortly after 11am, rising from the opening price of 8.864%, and showed the increasing nervousness of investors demanding more long-term finality to the crisis affecting the Irish public finances, and an apparent rejection of the four year economic plan.

Shorter-term borrowing has also spiked; four-year borrowing now costs more than 8%, at 8.029%.

Six-year bonds, meanwhile, stand at 8.509% – breaching a significant barrier of its own – while borrowing over eight years now costs 8.961%, as of 11:10am.

The cost of borrowing for Spain has also increased, now standing well above this morning’s opening cost of 5%, sending its own spread between Spanish and German 10-year borrowing to a new record of 2.47%.

The same spread when Irish bonds are substituted for those of Spain stands at 6.29%, certainly an all-time record.

Shares in Irish banks are holding steady this morning; shares in AIB are down one cent to 33c, while Ban kof Ireland is up 2c to 28c.

Irish Life and Permanent is up one cent to 63c.

Bank share prices quoted as at 11:10am.

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