* World stocks extend gains
* Damage from Irma seen less than feared
* North Korea tensions ease
* Dollar steady, euro edges higher
By Kit Rees
LONDON, Sept 12 (Reuters) - World stocks climbed to record highs on Tuesday as easing tensions over North Korea and signs that Hurricane Irma was causing less damage than feared in the United States boosted risk appetite.
MSCI All Country World Index edged up 0.2 percent, building on Monday's 0.9 percent gain which was its fourth-biggest so far this year.
The pan-European STOXX 600 index jumped to a one-month peak as insurers made further headway and basic resources and financials joined in the rally.
MSCI World's insurer index gained a further 0.3 percent, as insured property losses from Hurricane Irma's are expected to be smaller than initially forecast.
British consumer price inflation came in stronger than expected at 2.9 percent, offering more clues as to the Bank of England's policy decision on Thursday.
The central bank has been struggling to keep inflation at 2 percent since sterling tumbled in response to Britain voting to leave the European Union in June 2016, pressuring on consumer spending and living standards.
Another market focus on Tuesday will be the launch of Apple Inc's iPhone 8 as its sales will have repercussions beyond Apple for many suppliers as well as its rivals.
Helping to drive the uptick in risk appetite was relief that North Korea did not test-fire missiles or conduct nuclear weapon tests over the weekend as some had feared.
The United Nations Security Council unanimously stepped up sanctions against Pyongyang on Monday over the country's sixth and most powerful nuclear test on Sept. 3, imposing a ban on the country's textile exports and capping imports of crude oil. (nL4N1LT1JX)
"The measures did not include an outright ban on oil supplies to the regime, so the threat of an immediate military confrontation appears to have eased for now," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.
But investors remain wary of possible retaliation by North Korea against the latest U.S. sanctions following its nuclear test earlier this month.
UNWINDING SAFE-HAVEN BUYING
Safe-haven assets such as U.S. Treasuries and gold gave back most of recent gains.
The 10-year U.S. Treasuries yield jumped to 2.1515 percent from 2.1250 percent.
Sharp gains in U.S. bond yields supported the battered dollar, which held steady against its currency basket. The euro edged higher against the dollar at $1.1971 in early trades.
Gold dropped to $1,326.31 per ounce, compared to Friday's one-year peak of $1,357.4.
Additional reporting by Hideyuki Sano in Tokyo