Economist: Further credit downgrade possible

Ireland is now being viewed as the second most risky country in the eurozone after Greece.

It comes after the international ratings agency Standard and Poor's (S&P) downgraded Ireland's credit rating from AA to AA minus.

The agency is blaming the rising cost of bailing out the banks for the move which will make it more expensive for the Government to borrow money.

Alan McQuaid, Chief Economist at Bloxham Stockbrokers, said a further downgrade is possible if the cost of supporting the financial sector increases.

"Until there is full clarity there I think you're going to get international investors and these international credit rating agencies expressing concern" he said.

"Now I think these fears are somewhat overdone - however...unfortunately a lot of people heed what these agencies say".

"That is hampering our debt performance and pushing up the cost of borrowing on the markets" he added.