France bond sale rate hits highest since 2008

France sold benchmark 10-year government bonds at a 4.23 percent rate on Thursday, the highest auction rate since 2008.

The rate on the monthly sale of OAT bonds was up from 3.90 percent in August and 3.45 percent in February. The increase comes as higher energy prices have raised fears that central banks may raise interest rates to cool inflation, pushing investors to demand higher returns for lending to governments.

The bond sale adds pressure on Prime Minister Sebastien Lecornu as he tries to negotiate spending cuts for next year's budget. France's deficit reached 5.1 percent of GDP last year, above the European Union's three percent limit.

France's debt stands at 117.5 percent of GDP, nearly double the 60 percent limit set by the bloc's Stability and Growth Pact. On Thursday, the French 10-year yield was 4.223 percent, compared with 4.057 percent for the Greek bond.