France's 10-year government bond yield touched 5% for the first time since 2002, with the spread over comparable German bunds widening to nearly 160 basis points, the highest level in 15 years.
Rising energy prices further intensified market concerns over France's fiscal outlook.
UK gilts outperformed, with the spread between 10-year UK government bonds and German bunds narrowing to 196 basis points, the lowest since September 16.
The UK 30-year gilt yield fell nearly 6 basis points, marking the largest single-day decline since September 17.
Strategists said there are signs that investors are gaining confidence in the UK's fiscal position ahead of next week's budget announcement.
Despite rising UK inflation, market expectations for Bank of England rate hikes after November have cooled somewhat.
Market levels: German bund yields rose 2 basis points to 3.42%; German bund futures fell 24 ticks to 121.47; Italian 10-year government bond yields rose 6 basis points to 4.58%; the Italy-Germany bond spread widened 4 basis points to 116 basis points; French 10-year government bond yields rose 8 basis points to 5.01%; 10-year UK gilt yields fell 3 basis points to 5.38%.
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