Prices for government debt, or gilts, slumped for a third day after Alistair Darling admitted that the Treasury will be forced to borrow a record amount this year to plug the gaping hole in its finances. Bond investors knew that the Government would be forced to borrow more but were still stunned by the Chancellor's Budget admission that it will need to tap them for £220bn this year. That figure dwarfs the previous record of £146bn set last year and is more than the £180bn that was expected. "The main anxiety in the market is that this might not be the worst of it," said a bond investor. Ten-year gilt yields rose to 3.51pc at market close as fears have risen that investors may start to sell because they believe the UK economy is likely to deteriorate further.

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