Fitch cuts Ireland credit rating as woes mount

FITCH has cut Ireland’s credit rating again, citing the huge cost of cleaning up its banks as the regulator warned levels of soured property loans could be worse than disclosed and consumer sentiment plummeted.

The flurry of bad news, coming a day after rival rating agency Moody’s said it too might downgrade Ireland, drove yield spreads on Irish debt higher, putting further pressure on a Government already struggling to keep a lid on a debt crisis that threatens to spiral out of control.

As well as cutting Ireland to A+ from AA-, Fitch put its rating on a negative outlook, also pointing to uncertainty over the wavering economic recovery. The Government last week revealed that it could cost as much as €50 billion, or over €11,000 per head of a recession-weary population, to unwind years of reckless lending to developers during the Celtic Tiger boom.