Italy forced to pay record rates at bond auction

Italy has been forced to pay record interest rates in a 10bn euro ($13bn; £9bn) auction of treasury bills.

The rate of interest for the new debts due to be repaid in six months was 6.504%, compared with 3.535% in the last comparable sale on 26 October, the BBC reports. The rate for two-year borrowing was 7.814%, up from 4.628% last time. However, the Bank of Italy stressed demand for the bonds had been high, with demand outstripping supply by 50%. The FTSE MIB in Milan dropped 1% following the auction, down 1.9% on the day. The Italian government's implied cost of borrowing, based on the price at which its debts are traded on financial markets, has risen steadily over the last few w...