Ten-year gilt yields rose as much as 7 basis points to peak at 1.078 percent at 0710 GMT, their highest since March 22, compared with a 4 basis point rise for German Bund yields, which were also boosted by signs of progress in US-China trade talks.

"The apparent shift towards a softer Brexit and the avoidance of no-deal is bearish for gilts. But, it is not without significant risk," Citi fixed income strategist Jamie Searle said in a note to clients.

"PM May appears to want to avoid a no-deal outcome by opening the door to a softer Brexit agreed with the opposition or dictated by parliament," he added.