Another credit rating agency has threatened to downgrade Ireland’s rating as the economy continues to take a battering over the colossal bail-out for Ireland’s banks.
Moody’s, the credit rating agency in question, said that as well as the bank bail-out, the Irish economy did not show great prospects of recovery and that Irish bond yields had risen sharply since July, when they last rated Ireland. At that time, they cut Ireland’s rating by one notch.
"Ireland's ability to preserve government financial strength faces increased uncertainty as a result of (these) three main drivers, which together would further increase its debt and aggravate its debt affordability," Dietmar Hornung, Moody's lead sovereign analyst for Ireland, said.
The review of Ireland’s rating will center on the Government’s ability to preserve financial strength in the current economic climate, and stick to its new four-year fiscal plan when it is delivered in November. It is likely to be finished within three months.
If Moody’s downgrades Ireland, it is likely to be by just one notch – it is currently rated at Aa2 – which would still leave Ireland rated more highly by Moody’s than by two other major ratings agencies, Fitch and Standard & Poor’s.
Where does the term “the luck of the Irish” come from?