Cost of state borrowing spirals over investors’ fears

THE cost of state borrowing hit a high of 7.85% on bond markets yesterday as investors fear Ireland will default on its debts.

Expectations that markets would cut the cost of lending to the state after it published its €15 billion four-year budget retrenchment plan have not materialised.

At this stage Ireland has enough money in its coffers – roughly €40bn – to meet its funding needs out to June/July 2011.