Ireland downgraded as world markets fall

Ireland's reputation as the "Celtic Tiger" of the 21st century economy has been shattered after its sovereign debt was downgraded, sparking fresh fears about the possibility that it may default as it battles the crisis.

Standard & Poor's has announced that it is removing Ireland's coveted AAA rating and replacing it with a AA+ rating, capping a day of misery in global markets.

The decision will raise suspicions that the UK may soon find its own debt downgraded. The ratings agency said it had taken the decision after examining the prospects for the country's public finances. The country's finance ministry insisted that it was determined to keep its debts under control in the coming years, saying: "The government is committed to restoring order to the public finances by bringing the deficit below the three percent limit by 2013."

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