LONDON  - The euro rallied against the dollar on Thursday after official data revealed record high inflation across the eurozone, raising the prospect of increased interest rates, economists said. Traders were meanwhile awaiting official economic growth data out of the United States due on Thursday. In late morning London trading, the European single currency rose to 1.5615 dollars from 1.5575 late on Wednesday in New York. Against the Japanese currency, the dollar gained to 108.18 yen from 108.12 after nearing a one-month high in earlier Asian trade. "The rise in eurozone consumer price inflation to a record 4.1pc in July will keep speculation bubbling that the ECB could raise interest rates further following July's hike from 4.00pc to 4.25pc," said Howard Archer, chief European economist at the Global Insight consultancy in London. "Clearly, a further interest rate hike is a very real possibility, but we believe that 4.25 percent will mark the peak in eurozone interest rates although any cut is extremely unlikely to occur until 2009." Foreign exchange dealers were also digesting news that the unemployment rate in the 15 countries sharing the euro held steady in June from May at 7.3pc, according to the European Union's Eurostat data agency on Thursday. "The latest evidence of softening labour market conditions supports our view that the (European Central) Bank could be cutting rates by early next year," said Capital Economists analyst Jennifer McKeown. The dollar had come close to one-month highs against the euro and yen in Asian trading amid concerns that a US economic slowdown was hitting Europe and Asia, dealers said. "The market is optimistic that the US economy, while still weak, is holding up better than economies elsewhere," said Societe Generale analyst Kenichi Yumoto. Traders were awaiting US second-quarter economic growth figures due Thursday, as well as Friday's monthly US jobs report. Currency dealers in the past several weeks have detected signs of an improvement in US economic momentum. Although the employment report was expected to show a loss of jobs, "there is a growing view that Europe and Oceania are doing worse" amid the fallout from the US subprime loan crisis, said Yumoto. Wall Street analysts expect the US economy to have picked up pace after 1.0 percent growth in the first quarter. But they expect a loss of 75,000 jobs in July and the unemployment rate to tick up to 5.6 percent. The British pound fell after independent data showed consumer confidence was at the lowest level since 1974 in Britain and house prices in the country down 8.1 percent this month from a year ago, the largest year-on-year decline in 16 years. In London trade on Thursday, the euro changed hands at 1.5615 dollars against 1.5575 late on Wednesday, at 168.92 yen (168.39), 0.7882 pounds (0.7858) and 1.6347 Swiss francs (1.6322). The dollar stood at 108.18 yen (108.12) and 1.0471 Swiss francs (1.0471). The pound was at 1.9812 dollars (1.9817). On the London Bullion Market, the price of gold increased to 911.34 dollars per ounce from 897.50 dollars late on Wednesday.