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By Sruthi Shankar

Nov 7 (Reuters) -UK's FTSE 100 edged lower on Thursday after the Bank of England (BoE) cut interest rates as expected but projected higher inflation and growth following the new government's first budget.

By 1219 GMT, The FTSE 100 .FTSE slipped 0.1%, with the export-oriented index weighed down by a 0.4% rise in the pound after the rate decision.

Sterling GBP=D3 climbed 0.4% against the dollar after the Monetary Policy Committee voted 8-1 to cut rates to 4.75% from 5%.

The Britishcentral bank predicted that finance minister Rachel Reeves' budget last week - which includes significant increases in tax, spending, and borrowing - would likely add just under half a percentage point to the inflation rate at its peak in over two year, causing inflation to take a year longer to return sustainably to its 2% target.

Additionally, the BoE forecast that the budget would boost Britain's economy by about 0.75% next year.

"The Chancellor's decision to loosen fiscal policy is expected to provide a boost to demand in the medium term, though the MPC remains wary," said Jeremy Batstone-Carr, European strategist at Raymond James Investment Services.

"A cautious approach going forward also nods in response to the results of the U.S. presidential election this week, the impact of which on future trade policy and the global economy are yet to be established."

UK stocks fluctuated on Wednesday following Republican Donald Trump's U.S. presidential election victory, with investors concerned about potential higher tariffs impacting the European economy.

Attention now turns to the Federal Reserve's policy decision later today, with markets largely anticipating a 25 basis point rate cut.

The FTSE 250 midcap index .FTMC rose 0.6%, maintaining gains from before the BoE announcement.

Among individual stocks, BT BT.L fell 6.7% after Britain's biggest broadband and mobile company reduced its full-year revenue forecast from broadly flat to down 1-2%, citing weaker demand in corporate and public sectors.

Rolls-Royce RR.L dropped 4% after it stuck to guidance for annual profit growth of at least 30% this year.

John Wood Group WG.L plummeted 48% following an 8% decline in its third-quarter order book.

Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid

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