Focus on Irish polls as Portugal yields surge following political uncertainty

Irish elections will soon loom large for investors as political uncertainty yesterday helped send the borrowing costs of Portugal and Spain significantly higher.

Analysts say that a similar outcome as to that of Portugal, where anti-austerity parties are making a bid to form a government following national elections held last month, would likely have the same effect here, but the impact may be short-lived because of the much better prospects for the Irish economy.

The cost of borrowing for Portugal for 10 years widened “significantly” by 18 basis points to 2.86% yesterday as political uncertainty rose in Lisbon, said Ryan McGrath, senior bond trader at Cantor Fitzgerald Ireland.