UK/German bond yield spread widest in a month

LONDON Nov 10 (Reuters) - The premium investors demand to hold 10-year UK government bonds rather than euro zone benchmark German Bunds rose to a one-month high on Wednesday as British gilts underperformed after a Bank of England inflation report.

The BoE's inflation report said inflation pressures would pick up further in the near term, a comment which market participants said would make the resumption of quantitative easing difficult.

The 10-year UK/German government bond yield spread GB10YT=RREU10YT=RR widened by 7 basis points on the day to 69 bps, the widest level since early October.

"The report was less dovish than previous reports and reduced the chances we get quantitative easing from the Bank of England, so gilts are underperforming," Everett Brown, European bond strategist at IDEAglobal in London said. (Reporting by George Matlock)