The difference between the Ireland's cost of borrowing and that of Germany rose to a record high on bond markets today.

This evening, the yield - or interest rate demanded by investors - on 10-year Irish bonds was 5.86%. This was 3.66 points above the equivalent German rate, just above the levels at the height of the euro zone debt crisis in May.

The difference between Irish and German bonds has widened as investors have snapped up German bonds due to a deteriorating outlook for the global economy. This means the yield on German bonds had fallen to record lows just above 2%.

Earlier this week, Irish yields rose after a downgrade from credit rating agency Standard & Poor's, but an auction of short-term Irish debt yesterday attracted strong demand.