By Sujata Rao

LONDON (Reuters) -The pound slipped on Monday, touching its lowest in more than two weeks versus the dollar and euro, pressured by uncertainty over the Bank of England’s policy stance and an escalating post-Brexit spat with France over fish.

Robust German and U.S. inflation last week caused an aggressive re-pricing of interest rate bets in those markets.

While two Bank of England rate rises are expected by year-end, concerns about UK economic growth are preventing the currency from benefiting fully from rate expectations and surging gilt yields.

A weekly T-bill auction fetched an average yield of 0.216773%, compared to 0.135% at last week’s sale.

“FX investors have become more concerned about the inflation backdrop in the context of hawkish shifts by numerous central banks. This has, in turn, reduced risk appetite levels and the extent of upward pressure on sterling/dollar,” Stephen Gallo, head of European FX strategy at BMO Capital markets, said.

That meant “BoE hawkishness is unlikely to translate directly into pound appreciation versus the dollar in the current environment”, he added.

Sterling slipped 0.2% by 1745 GMT, at $1.3654. Against the euro, which has firmed on back of what markets felt was an inadequate ECB pushback last week against rate hike expectations, it fell 0.5% at 84.89 pence, the lowest since Oct. 13.

Some expect the BoE will raise rates by 15 basis points to 0.25% on Nov. 4, although a split vote is likely and some even reckon the bank may hold fire, contenting itself with a hawkish signal.

With economic growth under pressure post-Brexit, Britain’s bond yield curve has flattened more than euro zone or U.S. peers, with the gap between 2-year/5-year and 5-year/30-year yields narrowing to around 30 basis points.

Analysts at Nomura are among those who expect the BoE to wait until December before hiking, adding “it would be prudent for the bank to wait for the receipt of further information about the labour market”.

Adding to growth worries are the post-Brexit spat with the European Union over Northern Ireland trading arrangements and a fishing row with France. On Monday, Britain warned France to back down within 48 hours or face legal action.

UK ministers are also discussing the repercussions of triggering Article 16, which allows Britain to stop following some parts of the Northern Ireland Protocol under the Brexit agreement.

(Reporting by Sujata Rao;Editing by Alison Williams)