The yield spread between the two benchmark gilts narrowed to 75.9 basis points, its lowest level since early October 2016 and down around 4 bps on the day.

Analysts said the move was driven by similar moves in US and European markets rather than British economic news or a further hardening of bets that last week's Bank of England rate hike will be a case of "one and done".

Tuesday's very strong demand for a new 30-year inflation-linked gilt at sale via syndication also helped to flatten the British yield curve, said Vatsala Datta, fixed income strategist at RBC.

"Curves internationally have also been flattening, particularly in the US It's generally demand for safe-haven bonds," she said.

"In the US I think it's driven by policy expectations, there's no inflationary impetus domestically."

Political uncertainty has also helped to bolster safe-haven bonds such as gilts and US Treasuries.