Sept 19 Reuters The Bank of England looks set to keep interest rates on hold on Thursday as it awaits signs that inflation risks are quashed, putting the focus instead on a decision about bond sales that could feed into Finance Minister Rachel Reeves39; first budget.

British inflation held steady in August but sped up in the services sector, which is key for the BoE, showing why forecasters expect interest rates to fall more slowly than in the United States and the euro zone.

The Federal Reserve went on Wednesday for an unusually large halfpercentagepoint reduction, a move that reflected growing confidence about the outlook for inflation, according to Chair Jerome Powell.

The BoE39;s Monetary Policy Committee is likely to strike a far more cautious tone on Thursday.

All 65 economists in a Reuters poll published last week said it was likely to hold rates at 5.0, after cutting them in August from a 16year high of 5.25.

Financial markets pointed to a roughly 1in4 chance of a cut after Wednesday39;s inflation data, compared with 1in3 the day before.

News on price pressures has been mixed. Wage growth  another key metric for MPC members cooled as they had expected last month and the economy stagnated in July.

But the Decision Maker Panel  a business survey favoured by the MPC showed a downward trend in wage growth expectations has halted. Furthermore, services inflation crept up in August, albeit in large part due to volatile air fares.

Tim Graf, head of macro…