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Sterling drops as political concerns multiply

* Graphic: sterling and gilt yields http://bit.ly/2dgAXn1

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, Nov 13 (Reuters) - Sterling fell by nearly one percent on Monday, buffeted by political headwinds that put it on course for its biggest daily loss in more than 10 days.

The Sunday Times reported that 40 lawmakers from Prime Minister Theresa May's Conservative Party had agreed to sign a letter of no-confidence in her -- eight short of the number needed to trigger a leadership contest.

"Sterling is priced for soggy (economic) growth and difficult (political) negotiations," said Kit Juckes, global fixed income strategist at Societe Generale in London.

The pound fell below its 100-day moving average -- a key technical level -- and was trading nearly one percent down at $1.3072.

Against the euro it weakened as much as 0.7 percent to 89.11 pence per euro with signals from the currency options markets flashing amber.

Bond yields have in recent days also moved against sterling, eroding another support, despite a rate hike by the Bank of England earlier this month.

Differentials between U.S. and British 10-year bond yields have widened to nearly 120 basis points in Treasuries' favour, compared to 96 basis points in mid-September. (Reporting by Saikat Chatterjee; editing by John Stonestreet)