UPDATE 1-Higher UK borrowing plan sparks worst gilt selloff since December

* Yields jump after Sunak unveils budget

* 10, 30-year bonds set for worst daily performance since Brexit deal

* Money markets start pricing 10 bps BoE rate hike in Sept 2022 (Adds details, context)

By Yoruk Bahceli

March 3 (Reuters) - Yields on longer-dated British government bonds jumped on Wednesday, posting their worst performance since just before December's Brexit deal as the government unveiled much higher borrowing to support the post-pandemic economic recovery.

Economic growth would also recover quicker than originally expected, forecasts showed.

In his annual budget speech, Finance minister Rishi Sunak said the government would borrow significantly more in the coming financial year than thought just a few months ago.

The UK economy will also return to its pre-pandemic size in mid-2022, six months earlier than previously forecast, he added .

The extra spending would see Britain's Debt Management Office issue nearly 300 billion pounds in bonds during the coming financial year, versus the 247.2 billion pounds the market had expected.

The prospect of additional supply pressured existing debt which was already hit in recent weeks by a global bond selloff fed by expectations that a strong post-pandemic economic rebound would re-kindle inflation.

Yields on 30-year gilts -- as UK government bonds are known -- rose almost 10 basis points on the day to 1.33%, while 10-year yields rose 7 basis points to 0.76%, underperforming peers in the U.S. and the euro area.

Both bonds were set for their worst daily performance since signs of a Brexit trade deal emerged on Dec. 23. Bond yields move inversely with prices.

"While we didn’t expect Chancellor Sunak to drop the fiscal anchor at today's budget...the rise in the projected deficit from 164 billion pounds to 234 billion has stoked the bond market's concerns over the financing of this debt at a time when yields are rising," said Simon Harvey, senior FX market analyst at Monex Europe

Money markets now foresee a 10 basis point interest rate hike by the Bank of England in September 2022, a sharp reversal from expectations as recently as January that rates would be cut below 0% by August 2021

Yields on British 10-year inflation linked bonds rose nine basis points to -2.5%.

Shares in British homebuilders such as Persimmon, Taylor Wimpey and Barrat rose more than 5%, as a tax cut for homebuyers was extended to the end of June. Hospitality and leisure sector firms benefited from Sunak extending business rates exemption.

The FTSE 350 travel and leisure index rose 2.6% while shares in pub operator JD Wetherspoon gained more than 6%.

The pound was steady, trading flat at just below the $1.40 mark, though it was up 0.3% against the euro on the day

The Debt Management Office also said 15 billion pounds of the announced issuance will come from two new 'green' bonds -- which finance environmentally-friendly projects.

(Reporting by Yoruk Bahceli; additional reporting by Joice Alves, Danilo Masoni, Ritvik Carvalho and Thyagaraju Adinarayan; editing by Sujata Rao)