LONDON, May 17 (Reuters) - Borrowing costs in Italy took another leg higher on Thursday with benchmark yields on 10-year government debt rising to a fresh near three-month high at 2.18 percent.
The spread between Italian and German 10-year bond yields widened to 156 basis points, its widest since early January. It stood at around 130 bps earlier this week.
Higher yields on Italian debt rippled into other peripheral bonds with Portugal’s ten-year bond yields rising to a two-month high at 1.82 percent.
A draft programme for a potential coalition government between the anti-establishment 5-Star and the far-right League have rattled markets this week. The draft plans included a demand for debt forgiveness. (Reporting by Saikat Chatterjee; Editing by Dhara Ranasinghe)