+34
The market interest rate on 10-year government bonds rose to 3.68% during European trading, marking an increase of 0.2 percentage points in one week. This surge is driven by soaring energy prices and heightened fears of inflation, prompting investors to anticipate more aggressive rate hikes from the ECB. The National Treasury Management Agency warned that the annual interest bill could double by the 2030s due to higher refinancing rates and increased government borrowing.
Yields on US treasuries hit their highest level since 2007 in advance of the Federal Reserve meeting on Wednesday. Photograph: Michael Nagle/BloombergIrish government borrowing costs spiked on Tuesday at their highest level since late 2013 - when the State was coming out of an international bailout programme - as debt investors upped their bets on a raft ofThe market interest rate - or yield - on 10-year government bonds rose to as high as 3.68 per cent during European trading, marking an increase of 0.2 percentage points in one week as soaring energy prices have heightened fears about inflation and what central banks will do to rein it in.
The yield on the Irish benchmark bonds stood at about 2.9 per cent in late February, before the US and Israel attacked, setting off a months-long conflict. Irish 10-year yields are more closely correlated to those on German bunds, which serve as the main yardstick for measuring borrowing costs across the entire euro zone, than at any stage in the past two decades. Bunds rose to as high as 3.57 per cent.
Prime mixed-use investment off Grafton Street for €4m offers buyer 6.4%"The ongoing conflict in the Middle East, which has had a large effect on energy prices, the blistering hot summer, which will drive up food prices, and talk of large borrowing in bond markets by the tech sector have pushed 10-year and longer government borrowing rates higher," said Garret Grogan, head of Goodbody Stockbrokers' fixed-income, or bond, desk.
"One of the many things central banks have to worry about is inflation and the one thing they will not tolerate is even the risk of hyperinflation, which history has shown us leads to social unrest. " Money markets are now pricing four more quarter-point rate rises from the ECB over the next 12 months, following two rate rises since mid-June, according to Bloomberg data.
This points to a more aggressive path than the consensus view among economists for just one or two more increases - and a reiteration from the ECB last week that it won't pre-commit to further steps, after its latest hike. Oil prices are hovering around a four-month peak, with Brent crude standing at more than $108 a barrel, after Iran-backed Houthi forces in Yemen launched a new wave of attacks on Saudi Arabia on Monday and talks between Gulf states and Iran were postponed.
The National Treasury Management Agency (NTMA) is expected to go to the market with one more bond sale this year - either in October or November - having raised €10.9 billion in the long-term debt markets so far this year. It has a full-year objective of raising between €10 billion and €14 billion.had already warned in early July - when the 10-year yield was half a point lower - that the agency's annual interest bill was likely to double to "somewhere in the region of €6 billion" by the early 2030s.
This will come from the NTMA having to refinance debt at higher rates and government borrowings being poised to rise from €210 billion at the end of last year to "close to" €250 billion. The agency will need to go from refinancing almost €9 billion of debt next year to about €20 billion in both 2030 and 2031, the highest levels in about a decade, including initial repayments of European Financial Stability Facility (EFSF) loans granted during the State's international bailout 16 years ago.
The NTMA is continuing a strategy of holding large amounts of cash. It had a cash balance of €25.1 billion at the end of June, according to an investor presentation on its website.
Meanwhile, State-owned Gas Networks Ireland was braving turmoil across the debt markets on Tuesday as a group of investment banks and securities firms marketed a planned €300 million bond sale by the company. Building a home in Ireland takes twice as long as it did a decade agoOver-70s urged to check eligibility for energy costs payment from StateMetroLink could now cost €17.5bn, with inflation and design changes blamed for increaseWhat to look out for as the Dáíl returns from its summer reces
Irish Government Bonds Interest Rates Inflation ECB Rate Rises NTMA Energy Prices Debt Markets
Ireland Latest News, Ireland Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Irish Regulator Forces Stake to Block Service After Enforcement ActionThe Irish gambling regulator has forced the online betting platform Stake to block its site for Irish users, following a crackdown on non‑licensed operators and a crackdown on unlicensed betting in pubs. The GRAI now has enforcement powers to sanction operators, enforce age verification and other regulatory requirements.
Read more »
Trump proposes removal of US tariff on Irish whiskeyUS President Donald Trump announced that the 10 per cent tariff on Irish whiskey entering the United States would be lifted, offering relief to Irish distillers who had faced a disadvantage compared to whisky from the UK and other European nations. The decision follows lobbying efforts and was welcomed by Irish whiskey associations as a boost to a €450 million export market. The announcement was made during the final day of the Irish Open in Doonbeg, with Irish Prime Minister Micheál Martin present.
Read more »
Donald Trump's EU Visit: State Ceremonies, Golf and Protests in IrelandFormer US president Donald Trump holds official talks with Irish leaders in Dublin before presenting a trophy to Irish golfer Shane Lowry at the Amgen Irish Open, amid public demonstrations.
Read more »
Emmy Awards 2026: A Knight of the Seven Kingdoms and All Her Fault among Irish interestHBO Max drama The Pitt is tipped for victory with 25 nods across several categories
Read more »