Italy’s borrowing cost surges after poll

Italy’s cost of borrowing surged yesterday as investors dumped the country’s bonds in the wake of the general election.

Sovereign yields for Spain and Portugal also rose as concerns grew that political deadlock in the region’s third largest economy could re-ignite the eurozone crisis. Ireland’s spreads remained unchanged.

The election result was a hung parliament as the centre left Democratic Party, lead by Jean Luigi Bersani, marginally captured the lower house, while the former prime minister Silvio Berlusconi took the senate by the slimmest majority.