* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Updates prices) Nov 5 (Reuters) - German government bond yields slipped on Friday to their lowest levels in six weeks as investors reduced their aggressive bets on future interest rate hikes following dovish moves by the Federal Reserve and the Bank of England, and despite robust U.S. jobs data. The U.S. Labor Department reported nonfarm payrolls increased by 531,000 jobs last month, beating a Reuters forecast for an expansion of 450,000 jobs. Bund yields dropped to their lowest in a month and peripheral borrowing costs plunged on Thursday after the Bank of England (BoE) kept its interest rates on hold. Fed Chair Jerome Powell’s remarks signalled the day before the central bank was in no rush to hike borrowing costs. Germany’s 10-year Bund yield, the benchmark of the bloc, was down 6 basis point after hitting its lowest level since late September 2021 at -0.28%. It was set for its biggest weekly fall since June 2020. The 30-year Bund yield was down 10 basis points at 0.07%. A recent flattening of the 30-year Bund yield curve reflected a hawkish repricing of monetary policy expectations, while a correction was accelerated on Thursday by the BoE meeting. “Our fair-value model, based on 5y5y forward swap inflation, the five-year Bund yield and the ECB’s balance sheet, indicates that the 10/30Y Bund spread is still too flat at current levels,” Unicredit analysts said. The UK 10-year government bond yield fell 5 bps to 0.84% after dropping 10 bps on Thursday and was set for its biggest weekly fall since December 2020. “Even after yesterday’s adjustment, however, money markets are still discounting substantial tightening for next year,” Commerzbank analysts told clients. “This holds particularly true for the ECB given that current levels of Harmonised Index of Consumer Prices (HICP) forwards still do not meet the ECB’s first two of its three conditions for lift-off next year,” they added. ECB Vice President Luis de Guindos said on Friday euro zone inflation is still expected to fall next year as the factors driving it remain temporary but the rate of its decline will be slower than earlier seen. Italy’s 10-year government bond yield was down 6 bps at 0.88% on the day and set for its biggest weekly fall since May 2020. Reporting by Stefano Rebaudo, editing by Andrew Heavens, Hugh Lawson and Giles Elgood