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Sterling, short-term gilts yields fall after dovish BoE vote

BY Reuters | ECONOMIC | 07:25 AM EST

LONDON, Feb 5 (Reuters) - Sterling and two-year gilt yields fell on Thursday after the Bank of ?England held rates steady in a ?surprisingly narrow vote and said ?it expected a future ?cut if ?inflation continued to slow.

The pound ?extended losses against ?the dollar after the decision, and was last ?down 0.8% ?at ?a near two-week low of $1.3542. UK short-dated two-year gilt yields - ?which reflect short-term interest rate expectations - slipped after the decision to a three-week low of 3.63%, down ?9 ?basis points on the day.

UK 10-year gilt yields ?fell marginally and were last down 1.5 bps at 4.534%.

The blue-chip UK FTSE 100 pared some earlier losses after the ?decision, but still down 0.1% on the day.

(Reporting by Lucy ?Raitano; Editing by Amanda Cooper)

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Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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