A Spanish bond auction will send Spain's borrowing costs up on Thursday.

The sale comes as fears of a Greek exit, and worries over a subsequent Spanish banking crisis.

Unemployment is climbing in Spain, with a record 24.4 per cent of people out of work,  and investors are worried about the state of its banks. Borrowing costs have continued to increase despite reform of the banking sector.

The Spanish treasury is to sell up to 2.5bn euros of three and four year sovereign bonds.

Yields have risen in secondary markets, and there are suggestions that the same will be true in the government auction.