Federal Reserve expected to raise US interest rates this week as all eyes on predictions for 2019

The US Federal Reserve is this week widely expected to raise interest rates for the fourth time this year, with an anticipated range of between 2.25 and 2.50 per cent.

But doubts have begun to emerge about Wednesday’s announcement among analysts, after comments from Federal Reserve chairman Jerome Powell that the level of interest rates is “just below neutral”.

Michael Hewson, chief market analyst at CMC Markets, said the comments meant the raise “is less of the done deal that it was two to three weeks ago”.

The announcement will also contain projections for how much further the Federal Reserve will raise rates next year, “a key area of scrutiny” according to Hewson.

All eyes will be on whether policymakers have lowered these expectations, which currently forecast three further rises in 2019 and one in 2020.

Meanwhile, the Bank of England make similar rate decisions on Thursday. But with uncertainty over Brexit negotiations now looking set to continue well into the new year, analysts do not expect a change in policy.

“The BoE simply cannot justify tightening its belt while the risks of a no-deal Brexit are there,” said Fawad Razaqzada, analyst at Forex.

Thursday will also see UK retail statistics released by the Office for National Statistics. All eyes will be on the scale of the difference made by Black Friday last month.

The annual weekend spending bonanza was a let-down for retailers this year, with footfall down 3.2 per cent as consumers continued the move to online shopping.

Outspoken Sports Direct boss Mike Ashley said this November had been the “worst in living memory” last week.