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.

Borrowing costs hit multi-week lows on Thursday 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 1.5 basis points (bps) to 2.37% after

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

Markets priced in an ECB deposit facility rate at 1.9% in

December from 1.85% on Wednesday and from

1.95% late Friday before the announcements on tariffs by U.S.

President Donald Trump.

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

European Central Bank rate expectations, was up one bp at 2.06%.

The yield spread between OATs and Bunds -- a

market gauge of the risk premium investors demand to hold French

debt -- was at 72 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 yield gap hit 69.60 bps on Wednesday, its tightest level

since Oct. 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 1.5 bps to 3.46%, and

the gap between Italian and German yields stood at

108 bps.