LONDON, March 21 Reuters Sterling fell after the Bank of England BoE on Thursday kept its benchmark interest rate on hold as expected, while the Swiss franc fell to a multimonth low after the Swiss National Bank SNB surprised markets by cutting interest rates.

The BoE39;s interest ratesetters voted 81 to keep borrowing costs at their 16year high of 5.25 as the two officials who had previously called for higher rates changed their stance.

Governor Andrew Bailey said there had been further encouraging signs that inflation is coming down but he also said the BoE needed more certainty that price pressures in the economy were fully under control.

Sterling was last 0.3 lower on the day at 1.2742. Against the euro, it fell 0.23 to 85.62 pence, after hitting an almost threeweek low.

None of the nine MPC Monetary Policy Committee members opted for a hike this time around, compared with two last time. Markets took the news as dovish, with Gilts rallying and the pound weaker, said Matthew Landon, Global Market Strategist at J.P. Morgan Private Bank.

Still, the BoE looks more likely to be in the 39;late cutter39; camp. Even with recent progress that we have seen on price pressures, the UK still looks to be a couple of steps behind the rest of the world on their inflation battle.

The BoE39;s decision came a day after data showed inflation fell to its lowest level in almost twoandahalf years even if it remains higher than the bank wants.

Elsewhere, the Swiss franc fell…