The decision of the Spanish Budget Ministry to raise its budget deficit target from 3.5% to 4.5% of gross domestic product has left uncertainty at the long end of Spain’s sovereign market, with even “professional investors saying they can’t handle this anymore”, according to Societe Generale analysts.

The move by the Budget Ministry comes just a fortnight after the deputy budget minister had affirmed the previous targets and were taken as a sign that the Spanish government was retreating from its austerity drive.