Analysts urge caution on proposed US interest rate rise
29/06/2004 - 10:07:02US consumer spending rose to a three-year high in May mainly due to higher prices, ahead of an expected interest rate rise tomorrow.
The latest data showed that petrol and house prices fuelled the pace of growth and suggests that the Federal Reserve should be cautious if it decides to increase interest rates for the first time in four years.
Analysts believe the Fed will gradually raise interest rates back to more neutral levels on the breakdown of the latest data.
Policymakers are expected to raise the target rate from a 1958 low of 1% to 1.25%.
