The Federal Reserve has left US interest rates unchanged at 0-0.25%, with just one member of the committee voting for a rise.

The Fed explained that concerns over the strength of the global economy was a big factor in its decision.

It is widely expected that the US will be the first major Western central bank to raise interest rates, and speculation intensified that it could have started that process yesterday.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Federal Open Market Committee, which makes the decision, said in a statement.

In a press conference announcing the decision, Fed chair Janet Yellen, said: "We've long expected to see some slowing in Chinese growth over time as they rebalance their economy. There are no surprises there. The question is whether or not there will be a risk of a more abrupt slowdown than most analysts expect."

James Sproule, Chief Economist at the Institute of Directors said: “The Federal Reserve’s decision to hold interest rates is disappointing. It lacks the bold and necessary steps which must be taken to normalise monetary policy. A small increase would have set us on a path to normalising monetary policy and sent a clear message that the US economy can handle — and in fact, needs — higher interest rates.

“The big question now is how the Bank of England responds. The IoD continues to believe that this prolonged period of ultra-loose monetary policy should be called to an end sooner rather than later. The Bank of England appears reluctant to act before the Federal Reserve. Therefore today’s decision has implications far beyond the United States."