LONDON, Jan 30 (Reuters) - Borrowing costs in the euro area rose sharply on Monday after a strong inflation print from the German state of Saxony boosted expectations of pick up in inflation in Europe's biggest economy.
Consumer prices in Saxony rose by 2.3 percent year-on-year in January. Data from up to 16 German states is used to calculate preliminary inflation figures. Country-wide data, due at 1300 GMT, is expected to show German consumer prices hit the ECB's 2 percent target in January.
Germany's 10-year Bund yield rose 2 basis points to 0.49 percent after the data, heading towards last week's one-year high.
Many other euro zone bond yields rose to multi-month highs, with Italy's 10-year bond yield hitting a 17-month high at 2.29 percent. Portuguese and Austrian 10-year bond yields rose to their highest level in around a year , while Irish bond yields rose to 1.23 percent, the highest since Dec. 2015.
(Reporting by Dhara Ranasinghe; Editing by John Geddie)