Spain feels the pain as the cost of its debt soars

Spain paid over 100 basis points more to sell its treasury bills at an auction yesterday compared to last month, but met strong demand as investors piled in to scoop up an attractive yield. The Treasury sold €2.51bn (£2.13bn) in 12- and 18-month bills, in the middle of a €2-3bn target range.

The results had little impact on bond markets, but yields at the tender jumped dramatically from last month’s auctions after a renewed sell-off that has driven up borrowing costs for Spain.