All those worries that a bad set of US economic data could unhinge global markets, and provide further ammunition for a rise in US interest rates, proved wide of the mark yesterday.

With the US gross domestic product and employment cost index data showing less inflationary pressure than expected, there was only one way for markets to go. Though the FTSE 100 index was down around 12 points as the US numbers hit the newswires, trading screens quickly turned blue. Turnover increased sharply amid the widespread relief.

Earlier the market had given a clear indication of its uneasiness ahead of the US economic news, with Footsie dropping back below 6,000 but the rest of the market, the mid and smallcaps, was never under any real downside pressure. Dealers said the latest news would help markets calm down for the short term but insisted rate increases in the US, Britain and the euro zone next month were still a reality.