Investors sought the safety of longer-dated U.K. bonds afterPrime Minister Theresa May stepped up preparations for no Brexitdeal.

The nation's 30-year debt rallied more than shorter maturities,sparking a flattening of the yield curve, after May's delay of avote on her Brexit deal stoked concern the U.K. may tumble out ofthe European Union (EU). There's potential for the spread between2- and 10-year yields to invert within six weeks, said PeterChatwell, the head of European rates strategy at MizuhoInternational Plc, reflecting the economic risks of no deal.

“The yield curve is now on fire,” said John Wraith, head of U.K.macro rates at UBS Group AG. “The market clearly believes she willnot get anything material enough from the EU to turn that scale ofopposition around, so even if the vote is delayed it's going to endin the same way—with a big defeat for the government.”

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