* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
By Ritvik Carvalho
LONDON, June 22 (Reuters) - Sterling traded slightly below $1.27 on Thursday, investors treading water after a split at the Bank of England over monetary policy added further uncertainty to the outlook for Britain's economy as it leaves the European Union.
Barely a week after three members of the central bank's eight-strong rate-setting committee voted to hike record low interest rates, two of the Bank's top officials gave opposing signals on the Bank's stance towards interest rates.
Governor Mark Carney in a speech on Tuesday said it was not the right time to raise interest rates, while the Bank's chief economist Andy Haldane separately said he expected to vote for a rate rise later this year.
Sterling weakened almost 1 percent after Carney's comments, but was bumped higher after Haldane spoke on Wednesday, recovering to as much as $1.2704.
It traded 0.1 percent lower on the day at $1.2661 and 88.16 pence per euro on Thursday.
"For me the reversal yesterday on the Haldane comments looks overdone," said Jeremy Stretch, currency strategist with CIBC World Markets in London.
"I wouldn't be surprised if we were to see sterling drifting lower once again even if Kristin Forbes leaves with another parting shot at the MPC (Monetary Policy Committee) in terms of not getting behind the curve."
Outgoing MPC member Kristin Forbes, long an anti-inflation hawk on the BoE committee, is due to speak at London Business School later in the day.
Investors were also following political developments, with Prime Minister Theresa May's due to present to EU leaders her approach to giving guarantees to EU citizens over their rights in Britain.
After a snap election eroded her Conservative Party's majority in parliament, May is still in talks with Northern Ireland's Democratic Unionists' Party to form a minority government.
Finance minister Philip Hammond said he was confident May would strike a deal with the DUP to gain support for her minority government, and DUP lawmaker Jeffrey Donaldson said there was a "very good" chance of a deal by next Thursday.
"Sterling has had its Haldane-inspired lift, and probably has little further upside with the main focus on politics," Societe Generale strategist Kit Juckes said in a note.
Reporting by Ritvik Carvalho; Editing by Angus MacSwan