Sterling slumped on Thursday and British bond yields fell after the Bank of England said the economy in 2019 faced its weakest economic growth in a decade on rising Brexit uncertainty.
The British currency, which was already trading 0.3 percent down on the day before the rate decision, extended its losses to fall 0.6 percent at $1.2854, its lowest level in more than two weeks. Against the euro, the pound weakened 0.2 percent to 88.05 pence.
The 10-year British government bond yield fell to its lowest level so far this year at 1.158 percent, down five basis points on the day.
Short sterling interest rate futures rose by more than 6 ticks across the 2019 and 2020 contracts, indicating a flatter profile of market expectations for future interest rate hikes.
While policymakers voted unanimously to keep interest rates unchanged at 0.75 percent, as expected in a Reuters poll of economists, the central bank acknowledged growing risks to a slowing economy.
