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Page last updated at 09:49 GMT, Wednesday, 9 November 2011

Italian borrowing cost hits 'record high'

When you buy bonds - whether Italian or any other - you have to pay, in effect, a deposit.

Robert Peston explains how, as a result of demanding more cash for Italian bond deposits, the price of Italian government bonds as fallen leading to a rise in the implicit interest rate on debt.

That interest rate is above 6.70%, he explains, dangerously close the 7% that, in the case of Ireland, Portugal and Greece, led to the need for a rescue package.

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