* German industrial output rises more than f'cast
* France raises outlook, UK manufacturing upbeat
* Europe's top economies strong as US, weaker peers struggle
By Annika Breidthardt
BERLIN, Dec 8 (Reuters) - German industrial output soared past expectations and France's central bank upped its forecast for fourth-quarter growth on Wednesday, signs that Europe's biggest economies are speeding ahead while the debt crisis puts the brakes on smaller peers.
Upbeat economic signs from Germany, France and Britain also contrasted with the United States, where authorities are still worried enough about jobs and growth to be taking new steps on taxes and bond-buying to stimulate the economy.
German industrial production rose by 2.9 percent on the month in seasonally adjusted terms, beating even the most upbeat forecasts in a Reuters median poll of 1.0 percent, preliminary data from the Economy Ministry showed on Wednesday.
That adds to evidence Europe's largest economy will start 2011 in high gear, even as a sovereign debt crisis and resulting budget austerity undermines hopes for growth in Spain, Portugal, Ireland and others.
The crisis has already prompted Greece and Ireland to seek EU/IMF aid and fears are spreading that Lisbon and possibly Madrid could be next.
"The data show the core countries in the euro zone are in good shape, with Germany leading the pack. Only the peripheral states are struggling," said Fabienne Riefer, an economist at Postbank Research. "The divergence is here to stay for 2011."
French firms capitalised on Germany's stronger imports by exporting more to Germany in October and France's central bank also raised its fourth quarter growth forecast to 0.6 percent in a report on Wednesday.
UK manufacturing figures were again upbeat, reinforcing the case for countries to press on with strong budget consolidation.
However, a survey of purchasing managers earlier this month in Greece, which is going through its deepest recession since 1974, showed its manufacturing sector continued to contract in November, with domestic demand weak. [ID:nSLAUME6JE]
Meanwhile, a key gauge of business confidence in Portugal fell for a second straight month in November. [ID:nLIS002514]
CONSOLIDATE MORE
The strong tone contrasts with the United States, where the jobless rate last month hit a seven-month high and President Barack Obama has agreed to extend tax cuts for two years to reinflate the economy.
The deal with Republicans to preserve Bush-era tax cuts gave stock markets a boost across the globe, but concerns it may also spell longer-term budget strife drove U.S. bond yields to six-month highs.
That compares with efforts by the Federal Reserve, which this week hardened its tone on a $600 billion bond-buying programme that aims to bring yields and borrowing costs down.
U.S. 10-year yields
Li Daokui, an academic adviser to the Chinese central bank pointed to questionmarks over Washington's fiscal approach in comparison to European governments who have been desperately cutting back on spending in a bid to ease pressure on market yields.
"For now, market attention is still on Europe and for the coming 6-12 months, it will not shift to the United States," Li said when asked about U.S. President Barack Obama's plan to extend tax cuts for all Americans. [ID:nN07288652]
"But we should be clear in our minds that the fiscal situation in the United States is much worse than in Europe.
Employment in the United States barely grew in November, hardening views the Federal Reserve will stick to its $600 billion plan to shore up the anemic recovery.
IMPORTS WILL HELP
Other data from Germany showed unadjusted imports rose to a post-war record in October -- a sign of rising domestic demand which European and global peers hope will spread the benefits of German growth and help ease global imbalances. [ID:nLDE6B707H]
Euro zone peers have criticised Germany for its reliance on exports and weak consumer spending but imports from euro zone countries to Germany rose 17 percent compared to a year ago.
"As domestic demand recovers in Germany, that may help the peripheral countries, but that won't be a topic before 2012," said Riefer at Postbank.
Economists expect the euro zone economy to expand 1.7 percent in an uneven recovery this year, the highest in two years of polling. It is then expected to slow to 1.4 percent next year before picking up again to 1.7 percent in 2012.
(Reporting by Annika Breidthardt in Berlin, Zhou Xin, Simon Rabinovitch and Kevin Yao in Beijing; editing by Patrick Graham)