* Italian 10-year yield hits 3-month low of 0.71% * ECB to chart new policy path next week * EU set to raise 15.25 bln euros from bond sale * U.S. inflation rises more than expected (Updates demand value for bond sales) LONDON, July 13 (Reuters) - Italian government bond yields hit a three-month low on Tuesday as the European Central Bank said it would chart a new policy path as early as next week, further boosting demand for euro zone government debt. Euro zone policymakers said on Monday that the central bank would reflect its change of strategy - which includes a changed inflation target and more emphasis on asset purchases - in its next meeting to show it was serious about reviving inflation. “The ECB is able and willing to provide more stimulus for longer and that is what is being reflected in the market - lower yields and tighter spreads,” said Commerzbank rates strategist Rainer Guntermann. Indeed, euro zone borrowing rates were down 1-3 basis points across the board on Tuesday. And Italy, one of the lowest rated of the larger euro zone nations, was a particularly strong performer, with 10-year yields dropping 3 bps to a new three-month low of 0.71%. Others, such as France and Belgium, also saw their 10-year borrowing costs drop 1.5 bps to 0.03% and 0% respectively. Demand for European government debt was also apparent in debt sales, with the European Union garnering more than 147 billion euros ($174 billion) of demand for a dual-tranche 10-year and 20-year syndicated bond sale, according to memos from two lead managers seen by Reuters. It plans to raise 5.25 billion euros from the 10-year tranche and 10 billion euros from the 20-year tranche, according to a message to investors seen by Reuters, with final pricing expected later on Tuesday. REFLATION TRADE Safe-haven German and U.S. government bond yields held near recent lows even as U.S. inflation data showed consumer prices rose more than expected in June in the world’s biggest economy. In the 12 months through June, the consumer price index jumped 5.4%. That was the largest gain since August 2008 and followed a 5.0% increase in the 12 months through May. Even though the so-called “reflation” trade - inflation fuelled by fiscal stimulus - has lost steam in recent weeks, analysts still believe this is one of the most important data prints for markets at the moment. “The big question for markets and the (U.S.) Federal Reserve is the extent to which inflationary pressures persist. Many of the price increases in areas most affected by the reopening are likely to temper in the coming months – used cars, hotels and airfares, for example,” said Ambrose Crofton, global market strategist at JPMorgan Asset Management. “The consistent upside inflation surprises of recent months suggest that it is no longer appropriate for the Fed to have its foot firmly on the accelerator,” he added. ($1 = 0.8457 euros) (Reporting by Abhinav Ramnarayan, additional reporting by Thyagaraju Adinarayan and Yoruk Bahceli; Editing by Timothy Heritage, Alex Richardson and Gareth Jones) Our Standards: The Thomson Reuters Trust Principles.