Upturn in growth and inflation lifts European borrowing costs

Chris Papadopoullos
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EUROPEAN government borrowing costs are rising sharply, bouncing back from record lows.

The interest on German government debt climbed 0.59 per cent yesterday – reaching its highest rate of 2015.

It marks a sharp rebound from last week when the interest rate was as low as 0.15 per cent.

Rates on Spanish and Italian debt also jumped yesterday before erasing their gains later in the day.

Analysts have pointed to an upturn in inflation as one of the reasons. Eurozone inflation was zero per cent last month, ending the currency bloc’s brief journey into deflation. Another reason is an upturn in the Eurozone economic data which shows economic growth beginning to turn up.

It comes after the interest on many bonds across the Eurozone were pushed into negative territory after the European Central Bank (ECB) began its bond-buying programme in March.

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