LONDON, March 20 (Reuters) -

Short-dated gilt yields ticked higher on Thursday after the

Bank of England

held borrowing costs at 4.5% as expected, saying it was

waiting to gauge the impact of the U.S. tariffs hanging over the

global economy and that rates were not on a set path.

Short-dated government bond, or gilt, yields

reversed some of an earlier fall as traders slightly trimmed

their bets on rate cuts this year.

Two-year yields, which are sensitive to BoE rate cut

expectations, last traded 3 basis points (bps) lower on the day

at 4.177%, from 4.152% before the decision.

Money markets last priced in 51 bps of rate cuts by the

end of the year, compared to 54 bps previously.

The BoE's Monetary Policy Committee voted 8-1 to keep

rates on hold with only external member Swati Dhingra voting for

a quarter-point cut. Markets had been expecting a 7-2 hold vote.

"The Bank of England's decision to hold rates steady,

with a vote split of 8-1, was a slightly more hawkish vote split

than many assumed," said Dean Turner, chief euro zone economist

at UBS Global Wealth Management.

"As noted in the minutes, policy uncertainty remains

high, with a particular nod given to 'global trade policy

uncertainty'."

Sterling initially inched higher after the

decision, but last traded 0.4% down on the day at $1.2951, after

falling from an almost five-month high of $1.3015 earlier in the

session.

Britain's FTSE 100 stock index was 0.2% lower,

slightly down after the BoE, but outperforming global markets

where

equities slid

as traders fretted about risks to growth.

Benchmark 10-year government bond, or gilt, yields

were last down 5 basis points at 4.582%, from 4.569%

before the decision.

"There's a lot of economic uncertainty at the moment,"

BoE Governor Andrew Bailey said in a statement.

He said the BoE still thought rates were on a gradually

declining path but it would look "very closely at how the global

and domestic economies are evolving at each of our six-weekly

rate-setting meetings".

Investor focus

now turns

to Finance Minister Rachel Reeves's spring statement next

week, where she is expected to lay out cuts to spending to both

keep the government within its fiscal rules and jittery bond

investors onside.