* Bank of England may accelerate rate increases
* Treasury to sell $16 bln 30-year bonds
NEW YORK, Feb 8 (Reuters) - U.S. benchmark Treasury yields rose on Thursday to approach their highest levels in four years after the Bank of England said interest rates probably need to rise sooner, adding to expectations of reduced central bank stimulus globally. Bonds have weakened in the past week-and-a-half as investors adjust for the likelihood of a stronger U.S. economy and higher inflation, which could lead the Federal Reserve to boost rates more times than previously anticipated. An improving outlook internationally is adding to pressure on global fixed income markets. The BoE raised its growth forecasts for Britain due to the strong global recovery.
Weve got yet another confirmation that a major central bank is wringing its hands over the possibility that economic growth is accelerating beyond current capacity, said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.
Benchmark 10-year note yields rose as high as
2.875 percent after the meeting, just below Mondays four-year high of 2.885 percent. The notes were last down 9/32 in price to yield 2.866 percent. Investors are also preparing for a large uptick in U.S. government debt issuance this year to make up for declining purchases by the U.S. central bank. Thirty-year bond yields rose to their highest levels in almost a year before the government is due to sell $16 billion in 30-year bonds on Thursday, the final sale of $66 billion in coupon-bearing supply this week. The United States saw slightly soft demand for a $24 billion sale of 10-year notes on Wednesday and a $26 billion sale of three-year notes on Tuesday. Debt needs may rise further after U.S. Senate leaders reached a deal on Wednesday to raise spending on military and domestic programs by almost $300 billion over the next two years that will add to the deficit.
Thirty-year bonds were last down 23/32 in price
to yield 3.155 percent, after earlier rising to 3.167 percent, the highest since March 15. Next weeks consumer price and retail sales data is the next major economic focus for the market and will be closely scrutinized for further indications of rising price pressures.
(Editing by Bernadette Baum)