LONDON, Sept 16 Reuters The British pound rose against the dollar on Monday, after closing slightly in negative territory last week, ahead of this week39;s UK inflation data and central bank meeting.

Sterling rose by 0.5 on the day to 1.3190, above the 1.3125 it recorded at Friday39;s close.

Sterling is holding up quite well, said Niels Christensen, chief analyst at Nordea, with the general opinion being that the Bank of England would be a little bit less aggressive on rate cuts on account of an expected rise in core inflation.

The BoE is widely expected to keep interest rates unchanged this week after a 25basispoint cut last month, although futures markets on Monday implied a greater chance for a rate cut of a quarter of a point, at about 38 versus 20 on Friday.

Inflation figures, released on Wednesday, will be a key set of data ahead of the BoE39;s policy announcement, after data from Britain39;s Office for National Statistics last week showed the economy stagnated unexpectedly in July.

The expected rise in the core rate is one of the reasons why we do not expect a change in the key rate, said Volkmar Baur, FX strategist at Commerzbank.

However, if this does not happen, the BoE39;s decision could become more difficult after the recent weaker economic data, Baur added.

The European Central Bank lowered interest rates by 25 basis points last week and signalled a declining path for borrowing costs in the months ahead as inflation slows and economic growth in the…