Updated: 17:43
LAST WEEK, some – including Labour’s Joan Burton – believed that the aftermath of Brian Cowen’s early-morning interview on Morning Ireland was to blame for the rising cost of Irish government borrowing.
Today, however, it would seem that the ongoing uncertainty as to whether the Fianna Fáil government will survive the rumours of a potential leadership heave – and the general election that would almost certainly ensue – has driven the price up even further, as the interest rate on 10-year bonds hitstoward a landmark new record of 6.5%.
Having opened just off the previous all-time record (achieved last Friday), at 6.293%, the rumours of a potential challenge to Cowen’s premiership has seen the price shoot past 6.4% and inch towards the half-percentage point.
As a measure of the impact of the discussion on a leadership heave on the the price, the asking rate at 8am in New York – when the RTÉ News at One was beginning in this time zone, and mentioned Tom Kitt’s impending interview – was 6.371%.
At half-past the hour it was 6.421%; by 9am – just fifteen minutes after the news bulletin had finished – it had already rocketed up to 6.451%.
In the hour following, the rising tide has continued to nudge closer and closer to the 6.5% shore, and hit the barrier just after 3pm Irish time. Trading closed at 4pm with the price having rescinded somewhat to close at 6.459% amid rumours of yet another intervention by the European Central Bank to hoover up unwanted bonds.
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