The pound and gilt yields fell on Thursday, while Britain's blue-chip stock index hit a record after the Bank of England took another step towards lowering interest rates, as a second official backed a rate cut.

Sterling fell as much as 0.4% against the dollar to $1.2447 , a two-week low. The pound was at 86.18 pence per euro , down 0.2%.

Britain's blue-chip FTSE 100 stock index hit a new intraday record, rising 0.4% to 8387.82 points.

Gilt prices rose, pushing the yield on the benchmark 10-year gilt to 4.138%, little changed on the day. Bond yields move inversely with prices.

The BoE said on Thursday its Monetary Policy Committee voted 7-2 to keep rates at a 16-year high of 5.25% after Deputy Governor Dave Ramsden joined Swati Dhingra in voting for a cut to 5%. (Reporting by Samuel Indyk; Editing by Amanda Cooper)