LONDON, Sept 18 Reuters The British pound rose against the dollar on Wednesday after UK inflation data boosted the market view that the Bank of England will keep interest rates steady on Thursday, in contrast with an expected start to the U.S. policy easing cycle later on Wednesday.

Sterling gained 0.49 to 1.3227, a session high, recouping Tuesday39;s losses.

The Bank of England is widely anticipated to keep interest rates at 5 on Thursday, after official figures showed inflation stood at an annual rate of 2.2 in August, unchanged from July, despite a pick up in price growth in the services sector.

Meanwhile, industry data showed British supermarket sales growth slowed over the last month as consumers trimmed spending after their summer holidays.

Looking through the Bank of England39;s range of underlying services measures, we still see some marginal improvement in the data despite the uptick in the headline services measure, with underlying inflation continuing to ease. This is good news for the MPC, said Sanjay Raja, Chief UK Economist at Deutsche Bank, referring to the BoE39;s Monetary Policy Committee.

That said, today39;s data won39;t be enough to trigger a surprise rate cut tomorrow, Raja added.

Futures markets now imply a smaller chance of a quarter point cut, at 26, versus about 38 at the beginning of the week.

Sterling looks pretty strong, said ING currency strategist Francesco Pesole, adding eurosterling was not likely to jump back to 85 pence for now….