The cost of government borrowing over five-year and ten-year durations has increased by more than a quarter of a percentage point today.
This means that the cost to the Exchequer of borrowing to pay for day-to-day Government expenditure and capital spending has become significantly more expensive than it was on Friday. This is because the Government will probably have to offer a higher interest rate when it is selling bonds.
The cost of Government five-year money - borrowing for a term of five years - increased by more today then it did over the rest of the period since mid-December.
Today's increases in the cost of Government borrowing come in the wake of the announced nationalisation of Anglo Irish Bank and the risk to the Irish economy of bad loans, many linked to property speculation, on its balance sheet.
Already, the National Treasury Management Agency, which manages the national debt, says we will need to borrow €23 billion this year, of which €6 billion has so far been raised.
In the ten-year bond market, Irish Government bonds are trading at almost parity with Polish bonds.
Irish Government ten-year bonds are trading at a yield of 5.05%, which is almost the same as Polish ten-year bonds which are trading at a yield (or interest rate) of 5.13%. German ten-year bonds are trading at just under 3%.
Today, the yield on Irish Government ten-year bonds increased by almost more than a quarter of a point today. That compared to 0.75 points since mid-December.
Similarly the yield on Irish Government five-year bonds has increased by almost 0.3 points so far today to 4.21%. The increase in Government five-year money recorded today compares with an increase of just over 0.5 points since mid-December.
The cost of Government borrowing has been increasing arising from the economic slowdown and the crisis in the banking sector.
Ultimately, recession, along with the state guarantee scheme for bank borrowings and customer deposits and the announcement that Anglo Irish Bank is to be nationalised, means foreign investors see lending to Ireland as riskier.
