Concerns that Italy could become the next nation to be hit by a global populist revolt, which could sink Matteo Renzi's premiership in a referendum next month, drove its borrowing costs to their highest level for over a year on Friday.

Growing anger at the political mainstream in 2016 has seen Americans elect Donald Trump to the White House this week and Britons vote in June to leave the European Union.

It has also boosted support for anti-establishment parties in other countries in Europe and beyond, and could aid Italy's own 5-Star Movement as it seeks to wreck Renzi's attempts to win backing for constitutional reforms in the Dec. 4 referendum.

The prime minister has staked his political future on the vote over his plans, which would reduce the role of the upper house Senate and take back power from the regions. At the beginning of his campaign he repeatedly pledged to quit if he lost, but in recent months has refused to comment on such plans.

Investors see an increasing chance of voters rejecting his measures, which could lead to a period of political upheaval.

Government bond yields jumped to their highest levels since mid-2015 at an auction that failed to reach its planned maximum size as demand for riskier longer-dated bonds wavered.

With one of the world's largest public debt piles, Italy's borrowing costs are closely watched as a potential flashpoint for market instability in the wider euro zone.

They risked spiralling out of control during the sovereign debt crisis until European Central Bank President Mario Draghi pledged in July 2012 to do whatever it took to save the euro.

As well as investor concerns over the referendum, Italian bonds - like others around the world - have also been hit by expectations that Trump's pledged policies to cut taxes and spend on infrastructure would boost global inflation.

French bonds also fell victim to rising political risks this week as the country nears presidential elections next year when the far-right Front National is hoping to benefit from populist discontent.

"A victory for Front National leader (Marine) Le Pen would certainly put the EU's future in question," Credit Suisse said in a note, adding the chances of this happening were very low.

'Demolition Man'

Opinion polls suggest that Italian voters will reject Renzi's reforms. Pollsters, however, got it badly wrong in both the U.S. presidential election and the Brexit vote.

Ironically Renzi himself has appealed to anti-establishment anger, earning the nickname "Demolition Man" when he took power in 2014 for pledges to destroy old political structures. But critics say he has not delivered on his promises.

The prime minister is trying to present the constitutional reforms as a break with the past and entrenched powers. In a broadcast on Facebook this week, the 41-year-old dismissed comparisons between the referendum and the U.S. election or the Brexit vote.

"The referendum is a chance for Italians to choose change and a simpler system that costs less, or to keep the current one, bringing back to power the old guard that has already failed," Renzi said.

Carlo Galli, a deputy who left Renzi's Democratic Party (PD) for a small left-wing group last year, said the premier was "desperately" trying to show he was not part of an elite.

"It's bizarre to maintain that someone who has sat in Palazzo Chigi (the prime minister's office) for three years is not one of the elite," Galli told La Repubblica newspaper.

'Rising Tensions'

In Friday's bond sale, the Treasury sold 6.9 billion euros ($7.5 billion) of bonds, drawing demand for 1.5 times that amount but missing its upper target.

Weak appetite for the bonds due in 2040 and 2047 marked a shift in market mood just over a month after Rome drew strong demand with its first-ever sale of a 50-year bond.

"Today's auction, with weaker demand at the longer end of the yield curve, is probably one of the first signs of rising tensions on Italy's debt ahead of the referendum," IG strategist Vincenzo Longo said.

A ratings review by Standard & Poor's due later on Friday ramped up nervousness around Italy, and a Commerzbank note recommended investors buy low-risk German debt instead.

Analysts do not expect S&P to downgrade Italy's rating but its outlook could be at risk, following an outlook downgrade from Fitch last month which was based on weak growth and high debt as well as the political uncertainty.

Rome has already covered 96 percent of its funding needs for this year but debt management chief Maria Cannata has warned large redemptions next year will make refinancing tough.