Italy bond auction at record 6.47 per cent

Italy paid a euro era record yield of 6.47 per cent to sell five-year paper at its first auction of longer-term debt after the EU moved towards greater fiscal integration at last week's summit, but failed to convince markets it can solve the debt crisis.

The average yield at THE sale compares with an auction rate of 6.29 per cent Italy paid a month ago, which was also a euro lifetime record high.

Rome sold 3 billion euros (£2.5bn) of the September 2016 BTP bond, the top of an unusually small range of 2 billion to 3 billion euros for the sale.

Italy has trimmed the size of its auctions in reaction to market pressure but it will have to step up issuance in coming months if it is to meet a gross funding goal of around 440bn euros next year.