The rate the State pays to borrow money reached a new peak of more than 7 per cent today.

The yield on Ireland’s 10-year bonds reached a record 730 points, or 7.3 per cent, at 4.15pm.



The spread between Irish bonds and the German Bund also reached a euro-era high of 483 points.



Bond prices spiked last week following the collapse of Portugal’s budget talks, while Greece’s tax revenue shortfalls have reignited fears that peripheral European states may struggle to cut deficits.

The extent of and uncertainty surrounding the €15 billion budgetary adjustment being sought by the Government is also said to have spooked bondholders.

Minister for Finance Brian Lenihan said the negative developments in Greece and Portugal had helped push Irish Government bond yields up in the secondary market.



“The developments in Portugal and Greece have been negative and there has been a corresponding deterioration in Ireland’s position as a result,” Mr Lenihan told the Dáil last week.



“They [Irish bond yields] are very high but it’s a very thin market where Ireland is concerned at present.”