By Simon Miller

Spanish bond yields have come under fire again after the government said a bailout wasn't possible and bank borrowing figures for March were revealed.

Worries over the state of Spanish banks and the economy saw a flight to "safe haven" UK gilts and German bunds as the yield on Spanish debt and credit default swaps (CDS) widened.

Spain's 10-year yield is currently trading at 5.88% while CDS yields widened to 492bps.

The country's banks nearly doubled their borrowing to €316.3bn (£260.8bn) in March from the European Central Bank from the previous month, representing 28% of the total figure lent to eurozone banks according to the Bank of Spain.

Yesterday, Spain's prime minister Mariano Rajoy told reporters that Spain is not going to be rescued from its debt problems by the eurozone.

He commented: "To talk about a bail-out for Spain at the moment makes no sense. Spain is not going to be rescued; it's not possible to rescue Spain, there's no intention to, it's not necessary and therefore it's not going to be rescued."

Spain's troubled weighed into Italy's debt as well this morning with yields on its 10-year bonds widening to 5.445% as investors fled to German bunds and UK debt.

THe UK's 10-year yield tightened to 2.05% while German bunds slipped to 1.744%.

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