Ireland downgraded by ratings agency

Ratings agency Standard & Poors (S&P) tonight revealed it has downgraded Ireland's credit rating, blaming the cost of shoring up the country's troubled banking sector.

S&P cut Ireland's long term rating to AA-, three levels below its top rating of AAA. It also gave the country a 'negative outlook', indicating a further downgrade may be likely in the medium term.

"The projected fiscal cost to the Irish government of supporting the Irish financial sector has increased significantly above our prior estimates," S&P said in a statement.

Responding, the National Treasury Management Agency (NTMA) said that Ireland still maintains an AA (Double A) rating from all five of its rating agencies – Moodys, Fitch, S&P, R&I and DBRS.

"The AA rating is defined by S&P as meaning that a borrower has a 'very strong capacity to meet financial commitments'," NTMA said.

"The rating applied to Ireland today by S&P is higher than its ratings for Portugal, Italy and a number of other EU countries."

"We also note that S&P acknowledges the Government’s 'proactive and transparent approach” to dealing with the financial sector and that it believes this will 'help foster a gradual recovery of the Irish economy over the medium term."