Federal Reserve holds interest rates at 1.75%

The US Federal Reserve has held interest rates at 1.75 per cent.

The US Federal Reserve has held interest rates at 1.75 per cent.

A hold in the cost of borrowing was predicted by analysts, who believe a rate hike will be delayed until US business confidence improves.

US interest rates are currently at a 40-year low, and have been held at 1.75 per cent since December.

It's thought the Federal Reserve is holding out for signs that the US economy is experiencing solid growth.

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Although the economy made a confident start to the year, there are signs that the post-September 11th recovery has lost momentum.

Investor confidence has also faltered, with market-watchers wary of corporate accounting and debt, conflict in the Middle East, the prospect of war between India and Pakistan and the threat of additional attacks on the US.

Consumer confidence in early June and retail sales in April both declined, and the labour market remains weak, with jobs growth of 41,000 in May.

PA