Inflation in the U.K. increased unexpectedly in June, raising expectations that the Bank of England may start raising interest rates soon, possibly by the end of this year.

Figures Tuesday from the Office for National Statistics show consumer prices rose by an annual rate of 1.9 percent in June. That was the highest since January and up from May's 1.5 percent.

The consensus in the markets was for a far more modest increase of 1.6 percent.

With the U.K. economy growing faster than most other developed economies, the pressure is mounting on the Bank of England to start increasing interest rates especially if inflationary pressures are starting to build.

Following the figures, the pound rose 0.3 percent to $1.7140, an indication that increases in borrowing rates are on the horizon.