GE bonds 'hit by credit squeeze'

General Electric is one of the world's biggest makers of aircraft engines

General Electric is having to pay higher interest on its latest bond issue as a result of the global credit squeeze, a newspaper report claims.

The US industrial giant is paying an extra 7.2m euros ($9.8m; £4.9m) per year in interest on its latest bonds, said the Financial Times.

It said the higher cost showed it was harder for firms to gain investment in the current uncertain credit climate.

No-one from General Electric was immediately available for comment.

Centred on the sharp downturn in the US sub-prime mortgage market, the global credit market has contracted in recent weeks as investor confidence has plummeted.

With loan defaults in the US sub-prime sector at a record high, there is a fear that the problem of bad debt will spread to the wider economy.