Irish borrowing costs edge lower in €400m auction

YIELDS at a treasury bill auction yesterday fell from an auction two weeks ago after the Government announced on Wednesday that it would gradually wind down Anglo Irish Bank.

However, a smaller amount of bills than usual was sold in a bid to keep costs down and send a confident signal to markets while the Government works out the final cost of bailing out the banks.

Markets are nervous that the escalating cost of dealing with Anglo’s property binge combined with the biggest budget deficit in the European Union and anaemic economic growth could drive the country deeper into crisis.