Portugal yields soar at new bond auction

Portugal suffered a spike in its bond yields yesterday, despite issuing short-term debt to avoid high interest rates, according to Eurointelligence.

The country borrowed €500m (£426m) from the markets at interest rates of 3.69%, compared with the eurozone benchmark yield of 0.45%.

Portugal is already set to repay or refinance the money in six months, although its deficit will force it to issue vastly more over the course of this year.

Investors are increasingly speculating Portugal will need a bailout, following interventions in Greece and Ireland last year. (article continues below)

According to Eurointelligence, the Swiss National Bank has also declined to accept Irish bonds as collateral, fuelling fears Ireland may need to restructure its debt.