Robust UK housing datapropelled sterling to a 15-month peak against the euro yesterday.

Already on the front foot after data from Hometrack, a property website, showed UK house prices rising at their fastest pace for two years in October, the pound extended its gains after the Bank of England said UK mortgage approvals hit their highest levels for two and a half years in September.

Analysts said the data were another sign that August's surprise UK rate rise had done little to cool the housing market and paved the way for another 25 basis point rise in interest rates after the Bank of England's monetary policy committee meeting next week.

"Everything seems to be leaning towards a rate hike next week and I can't seeanything between now and then that will change that," said Adrian Hughes, a currency strategist at Société Générale.

By mid-afternoon in New York, the pound was 0.5 per cent higher against the euro at £0.6680, its highest level since June 2005.

Source:  Financial Times

Sterling also advanced0.2 per cent to $1.9020 against the dollar.