(Updates throughout, refreshes prices at 1607 GMT)

By Alun John and Amanda Cooper

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

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

monthly rise 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.

UK bonds came under fire, adding to the negative tone across

the global debt markets, as investors assessed the impact of

finance minister Rachel Reeves' "tax-and-spend" budget on the

outlook for growth, government borrowing and interest rates.

German 10-year yields rose as much as 7.2 basis points to

2.447%, their highest since late July. Bunds were last yielding

2.392%, up 1.8 bps on the day, having risen 26 bps

in October, the largest monthly increase since April.

The rise 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.

German two-year yields were up 3.1 bps at 2.314%, around

their highest since late May.

"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 on Thursday showed euro zone inflation

accelerated more than expected in October and could still pick

up further in the coming months.

U.S. nonfarm payrolls on Friday could drive the next big

move in Treasury yields as investors assess how much U.S. rates

may need to fall over the coming months - a theme present in the

UK markets too.

"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 UK rate cuts by December

2025, 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

are 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 bps ECB cut in December,

though have recently reduced expectations it might go for a

larger 50 bps 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 3.7 bps at 3.66%, also its

highest since early September, leaving the spread between

Italian and German yields at 125 bps.