Investor fears see Irish bonds rise close to record spread

IRISH 10-year bond yields yesterday climbed within 50 basis points of the 454 basis-point record spread, set on September 29, relative to similar German bunds.

The cost of bonds widened as investors feared the severity of the cuts will undermine growth and make it harder to get the deficit back to 3% of GDP by end 2014.

The ESRI has warned of the dangers of a slash and burn approach, calling for the deadline to be extended to 2016.