LONDON, Sept 23 (Reuters) - Government borrowing costs across the euro area rose on Thursday, after the Federal Reserve said it will likely begin reducing its monthly bond buying as soon as November and signalled interest rate rises could follow more quickly than expected. The selling in bond markets, which pushed prices down and yields up, was modest given that investors had been expecting the Fed to start tapering its $120 billion-a-month asset purchase programme soon. Still the reminder that the world’s most important central bank is on the path to exiting its pandemic-era stimulus put bond markets on the back foot. “There is some volatility evident as the market digests that while nothing has actually changed, the timing of the first hike is now sooner and a more complete taper announcement is more probable from the November meeting,” said Padhraic Garvey, regional head of research, Americas, at ING. In addition, Norway’s central bank is on Thursday expected to become the first central bank in the G10 group of developed economies to lift rates following the coronavirus crisis. Ten-year bond yields were 2-3 basis points higher across the single currency bloc. In Germany -- the euro zone’s benchmark bond issuer -- the 10-year Bund yield rose 3 bps to -0.30%, heading back towards more than two month peaks hit earlier this month. The Bank of England, which announces its latest rate decision later in the day, is also in focus as a surge in gas prices challenges the view that a jump in inflation is temporary. European Central Bank policymakers speaking earlier this week said they still see the recent inflation surge as temporary but acknowledge the risk that price growth may exceed their relatively benign projections. Flash purchasing managers’ index (PMI) data for the euro area due out in the morning will also likely be watched closely by markets keen to assess just how long rising inflation could last. (Reporting by Dhara Ranasinghe; Editing by Hugh Lawson)