Economists in London have welcomed the US central bank's decision to raise American interest rates by a quarter percentage point.
Analysts said the Federal Reserve's widely expected move to raise the federal funds rate to 1.25% from 1% - the first rise in four years - showed it was upbeat about the US economy.
They added that a decision to raise rates by a half-point could have spooked the markets and spelled trouble for investors.
The Dow Jones Industrial Average responded positively to the Fed's decision, moving from negative territory to a 24-point gain shortly after the announcement.
John Butler of HSBC said: "The fact we're seeing rates rise shows they are more confident about the US economy, which should be seen as positive for the UK economy."
Mr Butler added that he expected today's quarter-point rate hike to be followed by another 0.25 percentage point rise in August and for the Fed rate to reach 1.75% by the end of the year.
Thursday July 01, 2004
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