THE COST of Spanish borrowing increased again today when the country sold €2bn of one year bonds at an average yield of 2.623pc, nearly double the rate of 1.418pc at a recent similar sale.
The moves comes just a day after the cost of borrowing for longer term debt was over 6pc – moving dangerously close to bailout territory.
An additional €1bn of 18-month bonds went for 3.1pc, up from 1.7pc in a similar auction.
Up to now, Spanish borrowing costs had fallen sharply since the end of last year when they peaked above 6.5%.
The European Central Bank's €1 trillion special liquidity operation has been credited with calming investor nerves and reducing the borrowing costs of indebted euro zone nations such as Spain and Italy.
However, the recent increases have forced the Spanish Prime Minister Mariano Rajoy to say the country will not need a bailout despite fears that this is on the cards.