By Stefano Rebaudo
(Reuters) -British government bond yields rose and stocks fell on Thursday after the Bank of England cut interest rates by 25 basis points as expected, but inflation fears meant four of its nine policy makers voted to keep rates on hold.
Britain’s blue chip FTSE 100 index extended an earlier loss, and was last down 0.7%, with the mid cap FTSE250 index giving back earlier gains to trade flat.
Yields on British government bonds, or gilts, rose across the curve on the hawkish voting split. The benchmark 10-year yield was up 6 basis points at 4.59%. Rate sensitive two year yields also rose 6 bps to 3.89%.
Those higher yields supported the pound. It was last up 0.5% on the dollar at $1.3407, and also strengthened on the euro, to 87 pence to the common currency.
(Reporting by Stefano Rebaudo and Alun John, editing by Amanda Cooper)
