RISING anxiety over the debt crisis meant borrowing rates for Italy and Spain hit their highest level since the financial crisis yesterday.
Italy, which held its first government debt auction since it was downgraded by Standard & Poor’s last week, was able to raise its target sum of €14.5bn (£12.6bn) but two-year zero-coupon bond traded at 4.511 per cent, up from 3.408 per cent last month.
Spain sold €3.2bn of three and six month bills, stopping short of its target of €3.5bn. It offered a yield of 1.692 per cent, on three-month bills, up from the 1.357 per cent paid at the last auction in August.
Peter Chatwell from Credit Agricole said peripheral funding pressures remained severe despite a slight improvement in risk sentiment.