LONDON (Reuters) -British inflation held steady in August but rose in the services sector which is closely watched by the Bank of England, data showed on Wednesday, adding to bets in financial markets that the central bank will keep interest rates on hold on Thursday.

The decision to hold rates was not unanimous with one member of the Bank's rate-setting Monetary Policy Committee voting for a cut. Governor Andrew Bailey gave hints of further cuts - but forecast inflation will continue to rise.

The Bank of England is widely expected to keep interest rates on hold on Thursday after the latest UK inflation figures remained stubbornly high. Most economists think the Monetary Policy Committee (MPC) rate-setters will keep base rate unchanged at 5 per cent, its highest level since 2008, during the global financial crisis.