LONDON - Britain sold 800 million pounds ($1.08 billion) of 20-year inflation-linked debt on Thursday at the highest real yield in 24 years, highlighting the growing cost of issuing long-dated government debt.

The 0.625% 2045 index-linked gilt, which was first launched in April 2023, sold at auction at a real yield of 2.412% - the highest real yield since the auction of a 10-year index-linked gilt in April 2001.

The real yield represents the yield on top of the retail price index measure of inflation that is paid on British index-linked government debt.

The relatively modest 800 million pound sale attracted 3.131 billion pounds in bids, giving a bid-to-cover ratio of 3.91, the highest in Debt Management Office records of index-linked gilt auctions dating back to 1998.

The strong demand but high yield mirrors the launch via syndication of a new 10-year gilt on Tuesday which drew 141 billion pounds in orders but sold at the highest yield since 2008 for a 10-year conventional gilt.

Britain has shifted most of its gilt issuance this year away from index-linked and long-dated gilts due to concerns about locking in high borrowing costs.

On Wednesday, benchmark 20- and 30-year gilt yields rose to their highest since 1998, reflecting a global rise in the cost of long-dated borrowing this year as well as some investors' more UK-specific concerns on inflation and government finances.

($1 = 0.7402 pounds)

(Reporting by David Milliken; editing by William James)