LONDON, Jan 2 (Reuters) - Yields on benchmark British gilts rose by the most in over six months on Tuesday as investors sold European government bonds after an ECB official said its bond-buying might not be extended and data showed strong economic growth in the euro zone.
The yield on 10-year British gilts touched a high of 1.290 percent, their highest since Dec. 8, before closing at 1.289 percent, an increase of 10 basis points which was the most since June 15 last year.
The increase was sharper than the rise in yields for equivalent German bunds , extending the yield spread of 10-year gilts over Bunds by about 6 basis points to 82 basis points.
John Wraith, a fixed-income strategist with UBS in London, said Tuesday's rise in gilt yields represented an unwinding of moves in the opposite direction last week, when liquidity was thin, rather than being driven by specific news.
Yields on two and five-year gilts also touched their highest levels since Dec. 8.
Germany's 10-year bond yield hit a two-month high on Tuesday after Benoit Coeure, a policymaker in charge of the European Central Bank's bond purchases, said he saw "a reasonable chance" that the 2.55 trillion euro ($3.07 trillion) stimulus programme would not be extended when it expires in September. ($1 = 0.8302 euros)
(Reporting by William Schomberg, Editing by William Maclean)
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