Italian worries spook market

City A.M. Reporter
THE THREAT of a political crisis pushed Italy’s funding costs higher at an auction yesterday, as Prime Minister Enrico Letta warned that costs will spiral if instability is allowed to spook markets.

Italy’s treasury paid 1.34 per cent to sell €8.5bn in one-year bills, up from 1.05 per cent at a similar sale a month ago. On Tuesday night Italian politicians delayed a showdown over whether Silvio Berlusconi should be barred from the senate.