Cost of servicing Spanish public debt drops to lowest on record

BONDS issued by the Spanish government yesterday morning had the lowest yields on record for the country, as the cost of servicing debt dips to fresh lows across the Eurozone.

The €5.6bn (£4.61bn) of debt sold will yield just 3.059 per cent, the lowest since the start of the single currency, and far below the elevated levels seen in recent years. The sale follows Greek and Portuguese sales that yielded less than expected.

Meanwhile, figures released on the business climate in France and Germany yesterday morning mirrored purchasing managers’ index figures released the day before: Ifo’s business climate measure for Germany improved, rising to 111.2 in April, with a figure of 100 representing confidence in 2005.

France’s official measure of business conditions dipped, with BNP Paribas analyst Dominique Barbet saying that the figures suggest “the French economy is struggling to recover and under-performs the rest of the Eurozone.”