LONDON, March 22 Reuters Europe39;s STOXX real estate sector fell to a fivemonth low on Wednesday amid expectations both the Federal Reserve and Bank of England BoE will raise interest rates this week.

Tightening financial conditions are set to weigh further on the battered sector, which sharply underperformed the panEuropean STOXX 600 index on Wednesday.

The real estate sector fell 3.6 in its biggest daily drop since December. The STOXX 600 rose 0.4 at 1408 GMT.

Aroundtown shares were the biggest fallers in Europe, down 10 on the day amid concerns the Luxembourgbased company may cancel its dividend, according to two traders.

Surging UK inflation data released on Wednesday raised the chances of a 25 basis point BoE rate rise, when it meets on Thursday. The Fed is also expected to raise rates by 25 bps later in the day.

Reporting by Joice Alves and Danilo Masoni

Source Reuters