US may raise rates despite jobs shock

THE chairman of the Federal Reserve said further ‘gradual’ increases in interest rates in the United States ‘are likely to be appropriate’ despite concerns over the economy.

Janet Yellen admitted that last week’s employment report in the US – showing just 38,000 jobs were created last month – was ‘concerning’.

But she said rate rises are still likely because ‘positive economic forces have outweighed the negative’. Rates in the US went up for the first time in nearly a decade in December and further increases are expected this year.

But a rate hike this month seems unlikely given the jobs figures and uncertainty about the outlook around the world – including in Britain ahead of the EU referendum on June 23.

Yellen said: ‘One development that could shift investor sentiment is the upcoming referendum in the United Kingdom. A UK vote to exit the European Union could have significant economic repercussions.’