Ireland's cost of borrowing continued to move higher today on bond markets.
The interest rate demanded by investors to lend money to Ireland for ten years stood at a new high of 7.42% this evening. This meant that the closely watched gap between Irish and German borrowing costs has reached a record of almost five percentage points.
The development comes as government bonds in Portugal and Greece also reached their highest point since the euro was established.
The cost of insuring against a default on the debts of all three countries has also risen sharply.
Last week's announcement that Ireland would have a €15 billion gap to bridge over the next four year years did not go down well with international investors. The figure was double the estimate given by the Government last year.
That, combined with worries about Portugal and Greece, have increased jitters in the bonds market.
Last week an EU summit agreed a Franco-German proposal on a mechanism to resolve debt crises in the euro zone has also worried investors. The markets feel this could increase the likelihood of organised default in some countries.
Ireland does not plan to borrow until next year. But today's gyrations are a timely reminder that the Government has an increasingly tough job to convince markets that Ireland can fix its problems.
