The Irish Republic’s credit ratings were cut for the second time in three months yesterday amid rising worries over the cost of bailing out the country’s banking sector.

Standard & Poor’s reduced Ireland’s long-term credit ratings to double A, with a negative outlook, from double A plus. The country lost its top triple A rating at the end of March.

S&P’s move sent Irish banking stocks plunging, hit the euro and forced up the cost of insuring the country’s debt against default.

It puts more pressure on the coalition government of Brian Cowan, prime minister, which faces a no-confidence vote today after a rout in local elections and the loss of a key seat in Dublin in the European parliament to a Eurosceptic rival.

Financial Times, The Times