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.UK bond yields and sterling dip after BoE holds rates steadyIn a move consistent with expectations, the Bank of England has kept interest rates steady at 3.75 percent. They noted domestic conditions are helping to alleviate inflationary pressures. Following this update, there were minor decreases in UK bond yields and the pound. Inflation is anticipated to climb to 3.2 percent later this year while the FTSE 100 stock index saw an uptick on Thursday.Six of the Bank's ⁠Monetary Policy ‌Committee voted to hold rates, with ​three ​officials voting for a hike, one ⁠more than economists polled by Reuters had expected.In updated forecasts, the BoE's central projection showed inflation rising to 3.2% later this year from a 15-month low of 2.6% in June.That is a softer inflation outlook than in the Bank's last full forecasts in ‌April, but similar to what it predicted in June."For now, the Bank ​is not ​seeing enough ⁠to abandon its wait-and-see approach," said Schroders senior economist George Brown."Despite the sharp rise in energy prices, the ​majority appear unconvinced this will translate into more persistent domestic inflation."London's FTSE 100 stock index, which hit a record high earlier on Thursday, was last up 0.2%.