The Federal Reserve raised its benchmark overnight interest rate by one basis point on Wednesday.
The move came after two-and-a-half months of negative growth, with the unemployment rate hovering around 6.5 percent.
The U.S. economy grew at a healthy annual rate of about 3.7 percent in the first quarter, a pace the Fed expects to pick up again this year.
But the U.K. government cut its economic growth forecast in February for this year and its forecast for next year, which is based on assumptions about a slower pace of economic growth.
This was a big reason why the U,S.
and European Central Bank (ECB) are raising rates.
“The central bank sees the risk of an adverse shock to the labor market, which in turn may have a substantial negative impact on economic activity,” said Peter Boockvar, chief economist at BNP Paribas.
“These risks are compounded by the impact of a potentially adverse shock on financial markets.”
Bank of England Governor Mark Carney said the central bank is not expecting a significant increase in the cost of borrowing this year or next, but that he is likely to raise rates if there are “further signs that the economy is showing signs of weakening.”
The U: 1.2% unemployment rate.
The unemployment rate in the U: The U is the second-lowest unemployment rate on record, behind the 2.1% mark recorded in February, according to the Labor Department.
Economists say the rate is still below pre-recession levels, and has remained below the Federal Reserve’s target of around 2 percent for several years.
However, the U’s jobless rate is now slightly below the Fed’s target, at 1.1 percent.
The unemployment rate is below the 3.6% rate in December, and is expected to fall back to the 3 percent mark this year, according the latest data from the Labor Secretary’s Office.
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