Sterling drops, UK stocks bounce after BoE holds rates

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LONDON, Sept 21 - The pound fell to its lowest since March and British stocks rallied after the Bank of England held interest rates steady at 5.25%, following a cooler-than-expected inflation print the previous day.

The mid-cap FTSE 250 index also pared losses and was last just 0.08% lower. Both gauges outperformed the pan-European STOXX 600 , which was down around 1.1%. "There are increasing signs of some impact of tighter monetary policy on the labour market and on momentum in the real economy more generally," the MPC said in a statement.

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