The Fed is widely expected to leave rates unchanged when it releases statement at 7pm GMT tomorrow.

The Federal Open Market Committee (FOMC) voted unanimously to raise interest rates at its last meeting for the first time since 2006.

The move took the range of rates banks offer to lend to each other overnight, known as the Federal Funds rate, to between 0.25 per cent and 0.5 per cent.

An ugly start for the year in US and global markets is not expected to have increased FOMC appetite for another rise in rates.

Since the Fed announced in December last year that it would push up the benchmark rate of interest the S&P 500 stock index has fallen 9.5 per cent, while the Dow Jones Industrial index is down 10 per cent.

Oil prices have collapsed by 16 per cent since then and have been widely blamed for the equity sell off.

The Bank of England`s Mark Carney earlier today indicated the US rate hike and increased market volatility, though was not the root of the swings.

The FTSE 100 is down around 20 per cent from its highs last April.

Giving evidence to the Treasury Select Committee, Mr Carney said the Bank`s financial policy committee (FPC) he said: "It has long been the view of the FPC and myself personally that the start of the tightening of US monetary policy could lead to a tightening of global financial conditions, particularly for emerging economies, and could accelerate weakness, and we have seen some of that.”

Last week Carney repeated that he thought conditions were not yet right for an interest rate rise in the UK.

Consensus among economists is that the Fed will likely raise interest rates again in March, though much of that decision will depend on most recent economic numbers.

Later today Markit will relase is flash US service PMI for January, as well as the latest consumer confidence survey.

The last figures for December fell short of analyst expectations.

Sales at U.S. retailers declined in December, while manufacturing in the contracted at the fastest pace in more than six years, dragged back by slowing global growth and a strengthening dollar.

The outlook of inflation could be adjusted downward as the falling oil price weighs on prices.

Inflation in the US has been under the Fed’s 2 per cent target since 2012, climbing to a rate of 0.7 per cent in December from 0.5 per cent the month before.

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