* Bond market selloff gathers pace

* US Treasury yields at one-year highs

* Euro zone bond yields rise, JGB yields hit record peaks

By Amanda Cooper

LONDON, May 15 (Reuters) - The global bond market limped

to the end of a bruising week on Friday, as growing evidence of

economic damage from the Iran war prompts investors to assume

interest rates will rise faster than expected and growth will

suffer.

U.S. Treasury yields hit their highest since in around a

year as traders anticipate the Federal Reserve may need to hike

rates to rein in inflationary pressures stemming from Iran

war-fuelled energy shocks.

German, Italian and French bonds came under fire in early

European trading, while Japanese bond yields hit record highs.

Italian 10-year yields surged almost 9 basis

points (bps) to around 3.87%, bringing the rise for the week to

nearly 14 bps, while benchmark German Bund yields

rose almost 6 bps to around 3.11%.

Inflation data this week has shown consumers and businesses

are starting to see big increases in price pressures as a result

of the war, which has pushed up the price of crude by over 50%.

Two-year yields, which are the most sensitive to changes in

expectations for inflation and interest rates, have risen most

sharply this week, but yields on longer-dated bonds have started

to increase as well, reflecting investors' concern about the

longer-running impact from a price shock.

"It's not just inflation, but also higher deficits that

should be the focus," Jefferies strategist Mohit Kumar said.

"We are likely to see a number of support measures for fuel

subsidies announced in the coming months."

Kumar said he anticipated a steepening bias in government

bond curves, referring to a market dynamic in which longer-dated

bond yields rise more quickly than those for shorter maturities.

Benchmark 10-year Treasury notes US10YT=RR were last yielding

4.53%, up 7.3 bps on the day and around their highest since last

June.

In the UK, gilt yields have been on a rollercoaster ride this

week, hitting their highest in decades, as pressure mounts on

Prime Minister Keir Starmer to resign over his Labour party's

hefty losses in local elections and potential challengers to his

leadership emerge.