US dollars (4)

The US Federal Reserve could raise interest rates in June, depending on economic data, according to the minutes of its latest meeting.

The central bank said it would only raise rates if economic growth, employment and inflation figures are solid, adding that it thought many investors were surprised another increase could take place so soon. The Fed raised rates above zero for the first time since 2008 in December.

The Fed's next rate-setting meeting is set to take place just a week before the all important EU referendum. Some analysts had expected the Fed to delay its decision to await the outcome of the vote that could affect markets around the world.

In its latest meeting, the Fed said that recent figures are showing inflation on course towards its target of 2%.

The minutes show that: “Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward the [Fed’s] 2% objective, then it likely would be appropriate for the [Fed] to increase the target range for the federal funds rate in June.”

Financial markets have largely reacted badly to the news. Only Japan's Nikkei 225 reacted positively, with investors pleased to see the yen's value fall against the US dollar. The FTSE 100 opened 1.2% lower.