Investors sought the safety of longer-dated U.K. bonds after Prime Minister Theresa May stepped up preparations for no Brexit deal.

The nation's 30-year debt rallied more than shorter maturities, sparking a flattening of the yield curve, after May's delay of a vote on her Brexit deal stoked concern the U.K. may tumble out of the European Union (EU). There's potential for the spread between 2- and 10-year yields to invert within six weeks, said Peter Chatwell, the head of European rates strategy at Mizuho International 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 will not get anything material enough from the EU to turn that scale of opposition around, so even if the vote is delayed it's going to end in the same way—with a big defeat for the government.”