MUMBAI, Sept 18 (Reuters) - British government bonds and

the pound offered a muted reaction to the Bank of England's

widely expected decision on Thursday to leave interest rates

unchanged and slowing the pace of its sovereign debt holdings.

The yield on the benchmark 10-year gilt was

steady at 4.622%, little changed on where it had been trading

prior to the central bank's decision, while the 30-year gilt

yield was down 1 basis point at 5.423%.

Policymakers voted 7-2 to slow the annual pace at which the

central bank unloads the gilts which it purchased from 2009 and

2021 to 70 billion pounds ($95.38 billion) from 100 billion

pounds, broadly in line with a Reuters poll median forecast for

a decline to 67.5 billion.

Sterling initially rose after the BoE's decision

but pared those gains to last trade flat on the day at $1.3692.

It was little changed against the euro as well,

which traded at 86.72 pence.

Britain's benchmark FTSE 100 stock index was last up

0.1%, while the rate-senstive mid-cap stock gauge was up

nearly 0.3%.

($1 = 0.7339 pounds)