Italian six-month borrowing costs rose further at auction today, hitting their highest since last December at 2.104 per cent, as uncertainty over the euro zone's future push investors to ask for higher risk premiums.

Italy last paid 1.772 percent to sell six-month paper at the end of April.

Italy raised the planned €8.5 billion in bills, helped by reinvestment flows from €12.17 billion of bills maturing at the end of May.

The bid-to-cover ratio fell slightly from a month ago to 1.6 from 1.7.

The Treasury faces a harder market test tomorrow when it offers up to €6.25 billion in five and 10-year debt.

The threat of a possible Greek exit from the euro zone and growing troubles at Spanish banks have pushed up borrowing costs for debt-laden Italy in recent weeks.

Demand, however, has proved resilient, thanks also to a flood of longer-term European

Central Bank's liquidity provided to lenders in late 2011 and early 2012.

Reuters