Gilts have taken a bit of a hit at.....>

GILT SUMMARY: Gilts have taken a bit of a hit at the start of Monday trading

with yields around 3.5bp higher across the curve, as markets react to late

Friday comments from Bank of England Governor Mark Carney and build in hope once

again on a breakthrough on Brexit talks as PM May travels to Brussels to meet

with Juncker.

- BoE carney reiterated that it would be appropriate to raise rates in "coming

months". "we are running out of that spare capacity and that tolerance for

having inflation over target." Carney added.

- While PM May and Brexit secretary travel to Brussels for dinner with EC

President JC Juncker and EU chief negotiator Barnier he hope of trying to break

the deadlock on Brexit talks ahead of EU Summit at the end of the week.

- Markets attention is also on key inflation and employment data released

Tuesday and Wednesday respectively, with concerns that inflation will hit 3%.

Carney is also due to appear before the Treasury Select Committee on Tuesday

- 10-yr Gilt yield is currently 3.5bp higher at 1.401%