UK bond yields and the pound fell slightly on Thursday after the Bank of England held interest rates at 3.75% as expected and said domestic conditions were likely reducing inflationary pressures. Britain's two-year government bond yield, which is sensitive to BoE rate expectations, slightly extended its earlier fall to trade 7 basis points lower at around 4.38%. Sterling was last up 0.1% at $1.339, down very slightly from before the decision.