Cost of borrowing to state hits 6.53% high amid investor worry

THE cost of borrowing to the state hit a new high of 6.53% yesterday as investors worry the bank crisis will cause us to default on our mounting debt which will hit close to €180bn in 2012.

The interest rate demanded by investors to buy Irish bonds rose to new historic highs despite assurances from Finance Minister Brian Lenihan over the weekend that Ireland will be able to service its mounting debt without international assistance.

His department said there was “absolutely no truth” in recent market rumours that the Government may have to call in outside financial help to cope with its growing debt problems.