Interest rates didn’t change, but the language in Fed’s policy statement, which it released alongside its rate decision today, certainly did.

Open markets committee says ‘economic activity is expanding at a solid pace’ in first meeting under new chair Kevin Warsh

The US Federal Reserve left interest rates unchanged for the fourth time this year after its first meeting under new chair, Kevin Warsh, a Donald Trump appointee who has taken over the central bank during a tumultuous time for the US economy.

“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” the Fed’s open market committee said in a short statement. “Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

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© Photograph: Evelyn Hockstein/Reuters

© Photograph: Evelyn Hockstein/Reuters

© Photograph: Evelyn Hockstein/Reuters

The Federal Reserve kept its key rate unchanged Wednesday yet almost half the central bank's policymakers said they could support a rate hike later this year.

War’s impact on UK cost of living more muted than first forecast suggesting fuel price rises have failed to spill out more widely across UK plc

• UK inflation stays at 2.8% as slowing food prices offset transport costs

• Business live – latest updates

As soon as Iran choked off oil supplies through the strait of Hormuz at the start of March, there were dire warnings about rocketing UK inflation and the drastic action the Bank of England might take to rein it in.

At one point, investors were expecting as many as three quarter-point rises in interest rates before the end of the year – a sharp turnaround from earlier forecasts of rate cuts.

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© Photograph: Ceri Breeze/Alamy

© Photograph: Ceri Breeze/Alamy

© Photograph: Ceri Breeze/Alamy

Surprise ONS figure confounds forecasts of an increase to 3% as Bank of England prepares to set interest rates

UK inflation unexpectedly remained at 2.8% last month as higher transport and fuel costs were offset by slower food price rises.

May’s annual price rise reading recorded by the Office for National Statistics (ONS) came despite economists’ forecasts of a rise to 3% as the Middle East restricted global energy flows.

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© Photograph: Kevin Wheal/Alamy

© Photograph: Kevin Wheal/Alamy

© Photograph: Kevin Wheal/Alamy

Between a surge in interest rates, increasingly restive colleagues and the demands of President Trump, the new Fed chairman, Kevin Warsh, is in a bind.

© Alex Brandon/Associated Press