The Bank of Israel unexpectedly raised its benchmark lending rate by a quarter of a percentage point, saying economic growth and rising global commodities prices risk sparking inflation.

The rate the bank charges commercial lenders will be 3.75 percent as of July 26, the lowest since September 2005, a spokeswoman for the Jerusalem-based bank said today. Twelve out of 16 economists surveyed by Bloomberg had forecast no change while two expected an increase of a quarter point. (Bloomberg)