US Fed raises interest rates by 0.25%

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%. The move 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. Rates in the US have been at near-zero since 2008. There are concerns that a rise will compound that slowdown, as higher rates in the US could strengthen the dollar, the currency in which many countries and companies borrow. It puts US policy at odds with that in Europe, where even easier borrowing terms are being implemented. The European Central Bank earlier this month cut overnight deposit rates from minus 0.2% to minus 0.3% and extended a €60bn stimulus programme. The Bank of England this month voted to keep rates on hold at 0.5%, with its next move in interest rates not expected until late 2016.

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