The Bank of England raised interest rates by a quarter point to 5.5 percent, its highest level in six years. The move was widely expected by economists, as Britain tries to slow down rising inflation. It's the fourth increase since August.

In March, Britain's inflation rate rose to 3.1 percent, well above its 2 percent target, and its highest rate since 1997. Consumer and business spending remains robust in the U.K., and employment numbers remain strong.

Bloomberg News reports that Britain's interest rates are now the highest among the Group of Seven nations, as this latest rise pushes it past the 5.25 percent rate here in the U.S.

Rate increases have so far failed to slow the housing boom in Britain, which is also contributing to inflation. Housing inflation was 10.9 percent in the three months ended in April, according to Bloomberg.

The rate increase comes on the same day Prime Minister Tony Blair announced he will retire on June 27, ending his decade-long term of office. Gordon Brown, Britain's treasury chief, is expected to become the country's next Labor Party leader and prime minister.