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TREASURIES-Yields fall as Bank of England downgrades economic forecasts

* U.S. yields fall in line with tumbling U.K. bond yields

* Treasury yield curve flattest in a week

NEW YORK, Aug 3 (Reuters) - U.S. Treasury yields fell to more than one-week lows on Thursday after the Bank of England kept interest rates at a record low and downgraded its economic and inflation forecasts, raising concerns about global economic growth. A few weeks ago, investors had begun to price in the chance that the BoE might raise interest rates for the first time in a decade this month. Thursdays decision sent yields on 10-year U.K. government debt tumbling to their lowest since June 28.

Its pretty dovish testimony. They are again walking back policy, said Tom di Galoma, a managing director at Seaport Global Holdings in New York.

Benchmark U.S. 10-year notes were last up 4/32

in price to yield 2.25 percent, down from 2.26 percent late on Wednesday. The Treasury yield curve also continued to flatten, a day after the U.S. Treasury Department said it was still considering an ultra long bond, but didn't announce a new issue. The Treasury gave no timing for when it may make a decision on the bond. It also said it has begun to consider how it will increase debt issuance to make up for a future decline in U.S. Federal Reserve bond purchases. The yield curve between five-year notes and 30-year bonds flattened to 101 basis points, the lowest since July 25. Data on Thursday showed that the number of Americans filing for unemployment benefits fell last week,

(Editing by Jeffrey Benkoe)

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