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Spain’s borrowing costs up again
Spain saw yields jump at a bond auction yesterday, the first after its recent downgrade to triple-B by credit ratings agency Standard and Poor’s. However, demand remained solid, largely from domestic banks. The government raised €2.5bn (£2.03bn) as planned, paying 4.96 per cent on five-year debt, compared with 3.696 per cent at the last similar auction, and 4.03 per cent on three-year bonds, up from 2.617 per cent. Other markets remained stable, with yields on 10-year bonds down 0.068 percentage points over the day and stocks on the IBEX 35 up 0.29 per cent. But analysts worried the rising yields showed the impact of central bank liquidity boosts is wearing off.