BoE Holds Rates Steady as UK Bond Yields Dip

The Bank of England (BoE) held interest rates steady at 3.75% as expected, noting that domestic conditions are helping to alleviate inflationary pressures.

Britain's two-year government bond yield, which is sensitive to BoE rate expectations, fell by 7 basis points to trade around 4.38%. The pound sterling also dipped slightly, rising only 0.1% to $1.339.

In updated forecasts, the BoE predicted inflation would rise to 3.2% later this year from a 15-month low of 2.6% in June.