Italy borrowing costs hit record and closes in on 7%

Italy's cost of borrowing has touched a new record, approaching 7%, a day after Prime Minister Silvio Berlusconi said he would resign once budget reforms are passed.

The yield on Italian 10-year government bonds reached 6.98%, the highest since the euro was founded in 1999.

Investors fear that the eurozone's third-biggest economy could become the next victim of the debt crisis.