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Warning over Irish credit rating

Warning over Irish credit rating
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Credit agency Moody’s has warned it may cut Ireland’s rating again.

That is because of the recently announced up to 50 billion euro cost of cleaning up Irish banks, as well as the country’s weak economic recovery and rising borrowing costs.

Ireland’s central bank has just warned the economy will virtually grind to a halt this year.

The Dublin government will next month unveil a plan for tackling the EU’s worst budget deficit.

If Moody’s cuts Ireland’s current Aa2 rating by one notch, that would bring it into line with its peers
Fitch and Standard & Poor’s, who have already downgraded Ireland by more.

Separately on Tuesday, a survey showed Ireland’s services sector shrank for the first time in six months in September.

Purchasing Managers’ Index showed a fall to 48.8 in September from 52.9 in August due to a sharp drop in new orders, particularly in the domestic market. Business sentiment, while still positive, was the least optimistic since April.

That followed data last week which showed its manufacturing sector was back in recession.