People travel on a bus as it passes the Bank of England in the City of London, in London, Britain September 28, 2016. REUTERS/Toby Melville
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A sell-off in the British government bond market accelerated Monday amid nerves about political instability, pushing the yield on the 10-year gilt to its highest since the Brexit vote.It also led some analysts to say that foreign investors were demanding an extra premium before buying gilts.The benchmark 10-year gilt yield was at 1.17 percent, up around 8 basis points on the day, and having risen to 1.2 percent earlier Monday. Despite being only halfway through October, the 10-year gilt yield is on track for one of the biggest monthly increases since the financial crisis, up 42 basis points since the end of September. Most of the increase this month reflected expectations of higher inflation: conventional bond yields rose fast but inflation-protected bonds were little changed.Gilt yields have increased despite the BoE purchasing bonds worth about 14 billion pounds a month.
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