The pound and UK bond yields dipped on Thursday after the

Bank of England held interest rates at a 16-year high of 5.25%, but some policymakers said their decision not to cut was now "finely balanced".

Data on Wednesday showed British inflation fell to 2% in May, hitting the BoE's target for the first time since 2021, but policymakers remain concerned about underlying price pressures, including strong price growth in the services sector.

The pound was last down 0.26% on Thursday at $1.2685, from $1.2702 before the decision. It touched a one-month low of $1.2658 on Friday.

The euro rose slightly against the pound and was last up 0.1% at 84.56 pence. It dropped to a two-year low against sterling on Friday after French President Emmanuel Macron's decision to call snap elections rocked markets, but has since recovered somewhat.

The UK's 10-year bond yield, which moves inversely to the price, fell and was last down 2 basis points at 4.044%. UK stocks gained slightly, with the FTSE 100 up 0.4%, compared with a 0.1% daily gain earlier on.


(Reporting by Harry Robertson; Editing by Amanda Cooper)