The US Federal Reserve has raised interest rates on Wednesday from a range of 0% to 0.25% to a range of 0.25% to 0.5% percentage points. With this sudden development, the question now is; How will this affect UK?
Because following past record it seems its first increase since 2006.
The move takes the range of rates banks offer to lend to each other overnight – the Federal Funds rate – to between 0.25% and 0.5%.
It is likely to cause ripples around the world, and could increase pressure on the UK to raise rates.
It could also mean higher borrowing costs for developing economies, many of which are already seeing slow growth. Kamal Ahmed looks at what the move means for the the UK and the rest of the world.
However, The central bank believes the U.S. economy is strong now and no longer needs crutches and that the move “marks the end of an extraordinary period” of low rates designed to boost the recovery from the Great Recession.