Even as the decline in the cost of borrowing for Ireland and other euro zone states reversed course in April, exchequer returns pointed to a further easing in the cost of servicing the national debt.

Market rates remain very low. But if you think the only force at work is mounting investor confidence in the Irish story, stop right there. The obvious other factor is the European Central Bank’s bond-buying campaign, which provides but a “temporary” boon. Standard & Poor’s says current low borrowing costs in the euro zone are unlikely to trigger rating upgrades. The rating agency goes on to warn of an inevitable increase in borrowing costs as inflation returns to the target of below but close to 2 per cent.

Take note. As prospects improve for the Irish economy, plans are in train to expand the 2016 budget by up to €1.5 billion. But S&P warns euro zone borrowing costs are likely to be on the rise by the time the ECB scheme reaches the planned conclusion of the quantitative easing programme in autumn next year.

“Given the long average maturity of euro zone sovereign debt, only a small share is typically rolled over every year,” said S&P chief rating officer Moritz Kraemer. “To make a powerful impact, today’s very low yields would have to persist for much longer than for the announced quantitative easing period, which ends in September 2016. Should rates stay lower for longer, it would likely imply the ECB’s sustained failure to return inflation to its target.”

S&P believes this is unlikely, so be warned. “We believe that the ECB possesses the highest levels of monetary flexibility and credibility. Indeed, we believe that it will be able to engineer a return to the inflation target and that interest rates will rise in tandem.” Kraemer says today’s low rates are not the result of economic strength and improving fundamentals.

“They do not reflect improving creditworthiness in our view. They are a sign of weakness and deflationary tendencies that have triggered an unprecedented monetary response by the ECB.”

S&P sees no reason to react to currently low bond yields with automatic upgrades.

“That’s because we do not consider point-in-time interest costs to be a powerful predictor of sovereign defaults, which is what our ratings are meant to express.”