Ireland rating slashed as its misery grows

Ireland’s economic turmoil continued yesterday as Fitch cut its credit rating.

The news came a day after Moody’s said it was considering downgrading Ireland, driving up the nation’s borrowing costs.

The decision heaps further pressure on a government saddled with a debt pile set to hit a staggering €155bn (£136bn) this year – equivalent to £100,000 for each of the country’s 1.5m households.

As well as cutting Ireland to A+ from AA-, Fitch put its rating on a negative outlook, also pointing to uncertainty over the country’s wavering economic recovery.

Fitch said: “The downgrade of Ireland reflects the exceptional and greater-than-expected fiscal cost associated with the government’s recapitalisation of the Irish banks, especially Anglo Irish Bank. The negative outlook reflects the uncertainty regarding the timing and strength of economic recovery and medium-term fiscal consolidation effort.”

The Irish financial regulator yesterday warned of more bad news as the country’s property market continues to unravel. The government last week revealed it could cost up to €50bn to bail out economy.