rate hike

The US Federal Reserve have taken the plunge and raised interest rates, after increasing speculation over the last few months that the time was right for Yellen to make the move.

Interest rates saw a modest increase, rising 0.25% to a range of 0.25% to 0.5%, citing “considerable improvement” in the US jobs market as the reason for the hike. Yellen reiterated that this was the first move in a “gradual” process to get rates back to normal.

Recent employment news from the US has been promising, with unemployment falling to 5 percent, the lowest level in seven years, and growth sitting at a solid 2.1 percent.

European markets have reacted well to the news, with the main indexes up between 1 and 2 percent in early trade this morning. The FTSE is currently trading up 1.5 percent at 6152.2 (0910GMT).

Speculation as to when the Bank of England will raise rates in the UK will now increase considerably, although governor Mark Carney has reiterated strongly that he will not follow the Federal Reserve’s decision immediately. However, the US rate rise will make it easier for the Bank of England to make the move here.

Previous articleRolls Royce up after CEO announces management cuts
Next articleHardide Plc storms the AIM market on Airbus interest