Ratings agency Standard & Poor’s last night affirmed Ireland’s sovereign credit ratings but said the outlook remained negative. The agency has an AA rating on the State’s long-term debt and A-1+ on short-term borrowings.

S&P said the rating could be lowered “if asset quality in the banking system deteriorates at a faster pace than we expect”.

It also said the potential for a rise in “the already substantial” general government debt burden as a result of support for the banking system and weaker- than-expected public finances led it to maintain the negative outlook.