(Updates at 1140 GMT)

By Alun John

LONDON, Oct 31 (Reuters) - Euro zone bond yields rose to

multi-week highs on Thursday, and were set for their biggest

monthly gain in six months as traders processed a series of

developments around the world each largely pointing to a slower

pace of central bank rate cuts.

Germany's 10-year yield rose as much as 5 basis points to

2.425%, its highest since late July, and was last at 2.41%.

The euro zone benchmark yield has risen 27 bps in

October, which would be its biggest monthly increase since

April. The move is largely in line with those elsewhere, with

the benchmark 10 year Treasury yield up 47 bps this month, which

also would be its biggest increase in six months.

Germany's two-year yield was 4 bps higher at 2.32%, its

highest since early September.

"The big looming events are definitely the U.S.

elections and we've got big U.S. payroll numbers Friday, but

leading into those the economic data is holding up quite well

with upside surprises in the euro zone and the U.S." said

Michiel Tukker, senior European rates strategist at ING.

The

euro zone economy

grew 0.4% in the third quarter compared to the previous

month, faster than expected albeit still fragile, Wednesday data

showed.

In addition, numbers Thursday showed

euro zone inflation

accelerated more than expected in October and could still

pick up further in the coming months.

Always closely watched U.S. nonfarm payrolls are due

Friday, and before then is PCE inflation data, the Fed's

preferred gauge.

"Then in the UK you have yields going up, as, after the

budget, markets reconsider whether the terminal rate for the BoE

needs to be higher, and the conclusion of it all is that central

banks don't need to cut as much," Tukker said.

Markets now see fewer than four Bank of England rate

cuts by December 2025 as they digest finance minister Rachel

Reeves' budget, pushing the 10 year gilt yield to its highest in

a year.

Also in the mix is the U.S election, and while opinion

polls too close to call a winner, investors have been putting on

trades betting Republican candidate Donald Trump could be

president again, including bets that Treasury yields will rise.

The impact of the election on euro zone bonds is less

clear as while they have moved in line with U.S. peers in recent

years, tariffs on Europe under a second Trump presidency could

push the European Central Bank to cut rates more quickly, Tukker

said.

Markets are fully pricing a 25 bp ECB cut in December,

though have recently reduced expectations they go for a larger

50 bp move.

Elsewhere the Bank of Japan maintained ultra low interest

rates as expected, but stressed its resolve to keep hiking

borrowing costs if the economy sustains a moderate recovery.

Italy's 10-year yield was last up 4 bps at 3.66%, also its

highest since early September, leaving the spread between

Italian and German yields at 125 bps.