BRIAN COWEN has sought to calm panic over today’s increase in bond interest rates, describing the market activity as part of the ‘ebbs and flows‘ that have characterised the market in the past months.

Reacting to this morning’s developments – which saw the yields demanded of Irish debt increase from 5.74% to well over 6% before stabilising at just underneath that mark – Cowen said Ireland was internationally recognised as keeping to its budgetary strategy.

Addressing concerns over the final cost of the Anglo Irish Bank bailout, one of the main reasons behind the investor nerves that fuelled the market movements, Cowen said that finance minister Brian Lenihan was still in meetings with his European counterparts, and that these were going well.

Asked about last night’s Freefall programme, Cowen said that the government had introduced its blanket bank guarantee in order to convince markets that the Government was fully behind the country’s banking sector and was prepared to back it if needed.

The price of government debt also increased for Portugal and Greece, after a Wall Street Journal article indicated that the EU-led stress tests on the continent’s retail banks were much more lenient than previously thought.