Bailout fears grow as ECB buys Portuguese debt

Speculation Portugal is facing an imminent bailout was fuelled this morning as the European Central Bank was forced to buy the country's government bonds.

On Monday, 10-year Portuguese bond yields reached a new high of 7.16%, the fourth consecutive day yields had risen. The ECB was forced to purchase the bonds to avoid the market selling off sharply before important debt auctions in Lisbon on Wednesday, according to the FT. Officials have already admitted yields above 7% are unsustainable. Alan Wilde, head of fixed income and currency at Barings, says: "The crisis is reaching another key phase with debt auctions this week. It seems unlikely Portugal can avoid a bailout."