By Harry Robertson

LONDON (Reuters) - Clients at the world's biggest custodian bank, BNY, sold British government bonds in September at the fastest pace since the gilts crisis in 2022, in a potential sign of investor nerves ahead of the new Labour government's budget later this month.

British bond yields have recently risen compared to those in the euro zone, in part because of concerns about finance minister Rachel Reeves possibly changing fiscal rules and increasing spending at the Oct. 30 budget, fund managers say.

The rise in gilt yields also reflects slightly stronger UK growth and expectations that the Bank of England will cut rates at a slower pace than other big central banks.

"UK gilt markets recently faced the most concentrated round of selling by UK and international clients since the mini-budget of 2022," said Geoff Yu, senior EMEA market strategist at BNY, citing the bank's iFlow data. He said custodian clients sold 3.04 billion pounds ($3.97 billion) of gilts last month.

"While there can be many reasons for such sales, including changing Bank of England expectations, investor exposures to UK gilts have been reduced heading into the upcoming budget," he added.

BNY is a custodian of more than $50 trillion of assets for international clients including pension funds, endowments and other asset managers, and its iFlow data is based on movements in these assets.

($1 = 0.7659 pounds)

(Reporting by Harry Robertson; editing by Dhara Ranasinghe)