The situation in the US as far as interest rates goes, largely mirrors our own in the UK. With the onset of the recession the main rates that effect lending have been lowered to historic levels for many years and the Federal Reserve Bank of the US was expected by many to raise rates yesterday. They are the equivalent of the Bank of England and what they do as world economics are closely linked, will affect the UK.

They didn't change rates but again like the Bank of England, it is only a matter of time before they do. Hiking rates by ¼% which is almost certainly going to be the first move on both sides of the pond, will not change matters that much but it is a huge signal that cheap money will be getting dearer and there may be a succession of ¼'s at reasonable intervals.

The last thing these Central Banks want to do is to panic the markets, so if they wanted rates at a modest 1% higher, it would probably take a full 12 months to get there.