Feb 6 (Reuters) - Euro area government bond yields edged

higher on Thursday as investors awaited the Bank of England's

policy decision while weighing concerns about U.S. tariffs and

their impact on European Central Bank monetary policy.

The BoE is widely expected to cut rates by 25 basis points

and provide some guidance about the easing cycle outlook.

Euro zone borrowing costs hit multi-week lows on Wednesday

amid concerns that potential U.S. tariffs could have a

deflationary effect on the European economy and prompt the ECB

to deepen its easing cycle.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, rose one bp to 2.37% on Thursday after

hitting 2.345% the day before, its lowest since Jan. 2.

"While we are not expecting today's BoE meeting to be a

significant near-term market mover, not least given wider market

volatility and with payrolls tomorrow, it could still help set

up for a dovish pivot later," said Jamie Searle, European rate

strategist at Citi, referring to Friday's U.S. jobs data.

Investors have focused more on economic data since U.S.

President Donald Trump paused the announced tariffs on Canada

and Mexico. U.S. job figures on Friday could provide more clues

on the Federal Reserve policy path.

"The outcome for Europe remains uncertain," said Rune Thyge

Johansen, an economist at Danske Bank, referring to possible

U.S. tariffs on imports from Europe.

"We anticipate a limited short-term growth impact in the

euro area. Yet, the risks are clearly tilted toward a more

negative effect as tensions could escalate."

Some analysts said the demand shock facing euro zone

exporters in the event of higher U.S. tariffs was likely more

significant than the inflationary effect of potential European

Union retaliatory tariffs.

Money markets priced in an ECB deposit facility rate at

1.91% in December from 1.85% on Wednesday.

Germany's two-year bond yield, more sensitive to

ECB rate expectations, was up 2 bps at 2.057%.

The yield spread between OATs and Bunds - a

market gauge of the risk premium investors demand to hold French

debt - was at 70.5 bps after French Prime Minister Francois

Bayrou on Wednesday survived two no-confidence votes in

parliament, paving the way for the adoption of a much-delayed

2025 budget seen as key to cutting France's crippling debts.

The yields gap hit 69.60 bps on Wednesday, its tightest

level since October 31. It widened to around 90 bps, its highest

since 2012, in mid-January and end-November amid fears that

France would be unable to cut its growing budget deficit.

Italy's 10-year yield rose 0.5 bps at 3.45%, and

the spread between Italian and German yields stood

at 107 bps.