* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Updates prices) May 27 (Reuters) - Euro zone bond yields rose on Thursday, bringing to a halt a sharp rally since last week driven by dovish central bank comments, as a sell-off in U.S. and UK government bonds also hit the single-currency bloc. European Central Bank President Christine Lagarde’s comments last week that it was too early for the central bank to discuss slowing its pandemic emergency bond purchases (PEPP), reinforced by remarks from several other ECB policymakers, had sent euro area bond yields down sharply in recent sessions. But the rally came to a halt on Thursday, when Bank of England policymaker Gertjan Vlieghe said the bank could raise rates earlier in 2022 if the economy rebounds faster than expected, and headlines on the U.S. White House Proposal emerged. Those developments pushed UK and U.S. government bond yields higher, a move that was followed, though to a lesser extent, by higher-rated government bonds in the euro area like Germany’s, which often move in tandem with their foreign peers. ECB policymaker and German central bank governor Jens Weidmann then said governments must curb public spending after the COVID-19 pandemic to avoid a conflict with monetary policy, so that it is clear the bank is not putting monetary policy at the service of fiscal policy. The extent to which Weidmann would deviate from recent dovish signals by ECB policymakers was being watched particularly closely as he is among the most hawkish at the bank. “Weidmann didn’t have too much impact given his known hawkish credentials so it leaves Bunds subject to bearish (moves) on the other side of the Channel and the Atlantic,” said Richard McGuire, head of rates strategy at Rabobank in London, referring to German government bonds. McGuire added that the fact that Weidmann’s comments did not address the near term diminished the likelihood of the ECB slowing its bond buying at its upcoming meeting. Euro area yields had risen sharply earlier in the month, with Germany’s 10-year yield nearing positive territory last week, driven by speculation that a stronger economic outlook driven by speedier vaccinations in the bloc could prompt the ECB to slow the PEPP purchases at its June 10 meeting. After falling nearly 10 basis points during the last four sessions, Germany’s 10-year yield was up 3 bps at -0.171% by 1427 GMT. Most other 10-year yields were also up by around 3 bps. The Italian 10-year bond outperformed, with yields up 1 bp at 0.9325%, pushing the closely watched gap with German peers down to 110.06 bps. (Reporting by Yoruk Bahceli; editing by Philippa Fletcher, Alexandra Hudson) Our Standards: The Thomson Reuters Trust Principles.