Sterling strengthened by a quarter cent against the dollar and also rose against the euro on Tuesday after stronger than expected UK output data boosted rate rise expectations for later in the year. UK manufacturing output rose by 0.5 percent on the month and by 2.0 percent on the year in May, against a forecast of a 0.3 percent monthly rise and 1.5 percent annual rise. Industrial output rose by 0.5 percent on the month and 1.3 percent on the year in May, compared with forecasts of 0.4 percent on the month and 0.9 percent on the year. "The news on manufacturing is positive for sterling," said Philip Shaw, chief economist at Investec. Sterling rose to $1.8335 from $1.8310 before the data release, and strengthened to the day's highs of 67.02 pence per euro from 67.10 before the data. The Bank of England holds its monthly policy meeting this week but no change in current rates of 4.5 percent is expected. ////