Standard & Poor's Ratings Services has today lowered its long-term sovereign credit rating on Ireland to 'AA+' from 'AAA.' It added that the country's rating outlook is negative.

A lower credit rating usually makes borrowing more expensive.

S&P said the downgrade reflects its view that the deterioration of the country's public finances will likely require a number of years of sustained effort to repair, on a scale greater than factored into the Government's current plans.

It added that it expects the Irish economy will materially underperform the euro zone economy as a whole over the next five years.

S&P also said that the ratings on Ireland could be lowered again if the public finances weaken substantially further than what it currently assumes.

'The outlook could be revised to stable if the government embraces a fiscal strategy that contains the rise in the public debt burden in line with Ireland's modest economic growth prospects,' it added.

Credit rating agencies rate the ability of companies and countries to meet their financial obligations and their reports are watched by those who lend money in capital markets.