Morning business news - March 31

IRISH AND WORLD ECONOMIC CONFIDENCE STILL LOW - The cost of insuring Ireland's debt rose yesterday after the ratings agency Standard & Poor's cut the country's credit rating from the top AAA status to AA+. Insuring the debt rose to 255 basis points from 221.5 basis points on Friday. That means it now costs $255,000 a year to insure $10m in debt. Yesterday was not a great day on the markets either - London's FTSE 100 fell by 3.5%, led down by banks and commodity stocks. European shares were also lower. Wall Street indices closed down by between 3-4%.

Jeremy Batstone of Charles Stanley in London City says that Ireland's S&P downgrade is really a sign of the times and most international investors will not be surprised by the move. He points out that the Irish economy is mired in recession with substantial debt as a percentage of GDP. He says that credit rating agencies are still regarded as moving behind the times and he predicts that more downgrades from the likes of Fitch and Moodys will follow. The analyst says that much hinges on next's week supplementary Budget and says that if it is to work, it must produce a coherent and credible road map towards economic sustainability for the future.

Mr Batstone says that it can not be said with any degree of certainty that the bottom of the stock market collapse has been reached. Global markets hit significant lows at the start of the month on concerns over potential delays on the bailout of the US car industry. He says that concerns over confidence remain, especially in the run-up to the G20 summit in London later this week.

In order to ensure the safety at Charles Stanley when the G20 summit kicks off on Thursday, Mr Batstone says that they will be dressing down for the occasion. The pinned stripe suits and bowler hats will be ditched for 'scruffy jeans and t-shirts' and extra security will be deployed at the company's buildings.

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MORNING BRIEFS - Today's the day Bank of Ireland gets its €3.5 billion from the National Pensions Reserve Fund Commission. On Friday the bank's shareholders passed the resolutions needed for the Government's planned recapitalisation of the bank to go ahead, and the Finance Minister said a due diligence report on the company found no risk big enough to undermine the government's investment. The aim of the investment is to grow lending to small and medium sized businesses and mortgage holders.

*** It is expected that Michael Fingleton, the chief executive at Irish Nationwide Building Society, will step down within days, as its board has to report to the Finance Minister Brian Lenihan later this week on its review of the building society's executive structure.

*** A survey of business sentiment carried out with 760 companies by employers group IBEC, shows that almost two thirds of companies anticipate a pay freeze for staff, and almost the same amount anticipate a recruitment freeze at their businesses in the next three months. 20% of firms surveyed said they were going to introduce a pay cut, and 15% are considering it. 29% of firms expect to reduce permanent staff numbers, while 39% expect to lay off temporary staff.

*** On the currency markets this morning, the euro is trading at $1.3241 and 92.61 pence sterling.