Spanish borrowing costs soar

Madrid’s cost of borrowing has hit a new high amid renewed fears over the state of its public finances. Investors are demanding a yield of 4.9 per cent on 10-year bonds, the steepest level since July 2008 and the widest spread over German bunds since the start of the euro in 1999. Analysts said the fragility of the country’s banking system, which is struggling to finance itself, could lead to Spain receiving a European bailout.