Ten-year UK government bond yields fall below 1% for first time

British 10-year government bond yields sank below 1 percent on Monday for the first time, as government debt prices hit a new record high after investors continued to pile into safe assets following the country's vote to leave the European Union.

British debt prices soared on Friday after the country voted to leave the European Union, and on Monday finance minister George Osborne said the economy would have to face up to "an adjustment" as it dealt with the economic fallout.

Osborne said the public finances would suffer as a result of the vote to leave, but against a backdrop of sliding share prices, a falling currency and an uncertain economic outlook, investors continued to seek the safety of government bonds.

Leon Neal | AFP | Getty Images

Yields were down around 10 basis points from Friday's close across all maturities, as prices sharply outperformed equivalent German debt. Ten-year yields had dropped to a record low 0.985 percent by 0841 GMT, while 20-year yields hit a low of 1.729 percent and 30-year yields sank to 1.845 percent.

Two-year yields were the lowest since mid-2013 at 0.177 percent and five-year yields were the lowest since mid-2012 at 0.461 percent.

Short term sterling market interest rates were almost fully pricing in a quarter point cut in official Bank of England interest rates. The six-month sterling overnight interbank average rate stood at 0.2685 in morning trade.