Sterling up briefly, stocks fall as BoE holds rates

LONDON, May 8 (Reuters) - Sterling briefly rose on Thursday, while stocks extended losses, while UK rate futures fell after the Bank of England held interest rates at 5 percent, as expected, despite some talk of a back-to-back cut.

Sterling initially rose to around $1.9600 <GBP=>, approaching a session high after the central bank's announcement, before wiping those gains out but was still up 0.1 percent on the day.

The euro initially slipped to around 73.35 pence, but recovered those losses to trade at 78.45 pence.

The FTSEurofirst 300 turned negative after the decision to trade 0.1 percent lower at 1,360.37 points.

Gilt futures were unchanged, up 26 ticks at 108.27. June short sterling fell to trade 8 ticks lower at 94.44, having been about 3 ticks lower before the decision.

While most market participants were expecting the BoE to stand pat on rates, a significant minority of investors had been anticipating a cut after cutting by 25 basis points last month.

"There was a bit of a bounce in sterling as there was some talk of a back-to-back cut going into the meeting after a run of gloomy data over recent days," said AIB Group Treasury economist Geraldine Concagh.

"It's only a matter of time before they do cut again and we would expect the next move to come in June," she added.

(Reporting by London Markets Team)