LONDON, Oct 2 (Reuters) - Italy’s 10-year borrowing costs hit its highest level since March 2014 after a senior official of the ruling League party said most of the country’s problems would be solved if it returned to its own currency.
Italy would enjoy more favourable economic conditions outside of the euro zone, Claudio Borghi, the economic head of the ruling League party, said on Tuesday.
The yield on the country’s 10-year government bond rose 11 basis points to a 4-1/2 year high of 3.40 percent, topping the level hit after a brutal sell off on May 29 when the concerns over redenomination risk were at their peak.
The closely watched Italy/Germany bond yield spread stretched to 296 basis points, the widest since that May 29 sell off.
The country’s two-year government bond yield, meanwhile, was up 6 bps to a one-month high of 1.429 percent, and the five-year government bond yield rose 9 bps to a four-month high of 2.648 percent. (Reporting by Abhinav Ramnarayan, editing by Karin Strohecker)