LONDON: German government debt yields posted their biggest one-day decline in three weeks on Friday as wobbles on global stock markets and concerns about slowing economic growth pushed some investors back into bonds.

US Treasury yields also slipped as downward revisions to July consumer spending data implied economic growth had likely slowed in the third 2021 quarter. The market shrugged off a 0.3% climb in the personal consumption expenditures (PCE) index, a key inflation gauge.

However, German bonds were set to end the week lower, after witnessing five straight weeks of selling, that took yield to the highest in three months.

Yields on 10-year benchmark German government debt fell almost 5 basis points to as low as -0.243%. Borrowing costs fell across the euro zone, with Italian yields down 6.6 bps and set for their biggest daily fall in three weeks .

However, unease is also growing about accelerating inflation and the looming end of pandemic-era central bank stimulus that could see sellers return to bond markets next week. Consumer price inflation in the 19 countries sharing the euro sped up to 3.4% year-on-year in September, the highest since September 2008 and just ahead of analyst expectations, data showed.

"Inflationary pressures do not look to be as transitory as the major central banks have been claiming, with the markets increasingly taking this view and leading to the tightening we have been seeing in the financial markets," said Stuart Cole, head macro economist at Equiti Capital in London. European central bank policymakers have played down the rise in inflation as transitory, but price measures in Germany and France earlier this week also showed inflationary pressures picking up.

French inflation hit a near 10-year high of 2.7% in September, while German consumer prices, harmonised with other European Union countries, rose by 4.1% compared with 3.4% in August, the highest rate since January 1997.

Analysts interpreted Friday's softening in yields as broadly a consolidation rather than a structural change, as central banks have stuck to their hawkish guns despite signs of economies struggling to regain momentum.