US Fed holds rates but signals hike could come later this year

Stock market investors have piled in after the US Federal Reserve confirmed it would wait longer to lift interest rates.

Financial markets, which were watching closely for any sign of a clear timing for rate increase in the world's biggest economy, responded with the dollar losing value - standing at about $1.31 versus the pound.

Stocks surged across the US, Asia and Europe.

The FTSE 100 pushed past the 6,900 barrier to close 77 points, or 1.1%, up at 6911.

London-listed global mining stocks led the way, with Glencore (Frankfurt: 8GC.F - news) and Fresnillo (Frankfurt: A0MVZE - news) both ahead by more than 5%.

Lower US rates for longer ease pressure on the emerging market economies whose appetite for commodities is important for the miners.

The Fed said US economic activity and jobs growth were "solid" in recent months, with growth picking up after a subdued start to the year.

Fed chair Janet Yellen said: "We judged that the case for an increase has strengthened, but decided for the time being to wait for further evidence of continued progress toward our objectives."

Officials want to wait for more evidence of progress on jobs and inflation - which remains low - before a hike.

However three of the Fed's rate-setters dissented, voting in favour of an increase.

The decision means the Fed's main target rate is held in a range of 0.25% to 0.5%.

It has been at that level since last December, when officials decided to raise the rate for the first time since the financial crisis.

Attention will now turn to this December's rates meeting, with experts expecting that officials will avoid a rate hike in November, which would come just days before the US presidential election.

There was little surprise in the latest Fed decision - though there had been some speculation over the summer that a September hike might be on the cards.

The announcement on Wednesday came hours after the Bank of Japan cheered markets with a tweak to its monetary policy strategy - though it left rates at -0.1%.