The British pound rose after the Bank of England made an unexpected rise in interest rates by a quarter of a percent. Thr British pound then rose to its to its highest level since June 2005 after the Central bank lifted its interest rates to 5.25 percent. Investors are betting a second interest rate rise after today, as inflation in house prices has rose quicker ever since the rate increase last November. ''It took the markets by surprise,'' Marios Maratheftis, a currency strategist at Standard Chartered Plc, said in London. ''People will start to consider the possibility of more interest rate hikes. It's a significant positive for sterling.''

In forex-trading, against the Euro, the British pound was worth 66.38 pence compared to 66.92 yesterday. Against the US. Dollar, it was at 1.9448 US. cents from 1.9221 US. cents. The U.K interest rates currently are the same as the US. Federal Reserve's.