Irish banks have returned to financial health but non-performing mortgage loans will drag on their credit scores for some time, according to S&P Global Ratings.

AIB is in sufficiently good financial health for the Government to sell shares in the bank, an S&P Global Ratings analyst has said.

Sterling rose against the euro yesterday after the path was cleared for UK home secretary Theresa May to be appointed prime minister, as S&P Global Ratings sounded its concerns over the “the vulnerability” of the British housing market.

The Government will have to do more to rein in health costs if it is to avoid a bigger debt pile, S&P Global Ratings has warned.

Ireland is the country most exposed to an economic fallout, if the UK were to vote to exit the EU in less than two weeks, S&P Global Ratings has said.

Moritz Kraemer, the chief sovereign rating officer at S&P Global Ratings, has played down the risks facing Ireland if the UK were to vote in less than a month to exit the EU.