:00:00. > :00:00.Now for the latest financial news with Sally Bundock and
:00:00. > :00:19.Markets surge as the US raises interest rates for
:00:20. > :00:26.Plus - from soya puddings, to school fees, to Star Wars - how
:00:27. > :00:41.people across the world will soon be feeling the Force of the Fed.
:00:42. > :00:44.I'm Sally Bundock - also in the programme:
:00:45. > :00:48.Hong Kong follows the Fed and raises its interest rates.
:00:49. > :00:52.Our team in the region will have all the reaction from Asia.
:00:53. > :00:55.We start of course with the big news affecting markets, businesses
:00:56. > :01:00.We have been talking about it for months but
:01:01. > :01:04.America's central bank - the US Federal Reserve -
:01:05. > :01:10.has raised the cost of borrowing for the first time in almost a decade,
:01:11. > :01:13.signalling the end of the era of ultra-cheap money that has had a
:01:14. > :01:19.Let's take a look at the detail.
:01:20. > :01:22.The Fed has increased the range of its benchmark interest rate
:01:23. > :01:31.That determines what banks charge each other to borrow money
:01:32. > :01:45.That is the first move for quite some time.
:01:46. > :01:48.It's now between a quarter and a half of a percent.
:01:49. > :01:52.It's a small step - but is it the first of many rises - are US
:01:53. > :02:09.This was Janet Yellen's wording, we will proceed readily. That has
:02:10. > :02:11.reassured investors. She said the process was likely to be gradual,
:02:12. > :02:13.just what they wanted to hear. Policymakers at the Fed say that
:02:14. > :02:17.the cost of borrowing is likely to be just under 1.4%
:02:18. > :02:19.by the end of 2016. That implies four more
:02:20. > :02:21.rises next year. Traders are betting
:02:22. > :02:23.the next move will be in April. That's of course assuming the US
:02:24. > :02:27.economy remains in good health. Michelle Fleury was at the Fed
:02:28. > :02:39.in Washington. For many, the rate increase was a
:02:40. > :02:43.vote of confidence in the US economy at a time when the rest of the world
:02:44. > :02:48.is still struggling. It reflects the progress being made in the labour
:02:49. > :02:52.market, and America's return to some kind of growth. The recovery is not
:02:53. > :02:56.yet complete. Acknowledging that inflation is still below its desired
:02:57. > :03:02.level, Janet Yellen was at pains to stress future interest rate rises
:03:03. > :03:06.will be gradual. The committee expects the economic conditions will
:03:07. > :03:11.evolve in a manner that would warrant only a draw increases in the
:03:12. > :03:16.federal funds rate. The federal funds rate is likely to remain for
:03:17. > :03:23.some time below levels that are expected to prevail in the longer
:03:24. > :03:27.run. Wednesday's move may be small, but it is a step towards returning
:03:28. > :03:32.to some kind of normal for the US economy, and future steps are bound
:03:33. > :03:36.to attract as much speculation as this one.
:03:37. > :03:44.The impact of that decision from the Fed is being felt across the world.
:03:45. > :03:47.Let's go to Singapore now and talk to our Asia business
:03:48. > :03:53.Markets are up strongly, but we have also had a move
:03:54. > :04:08.Yes, and to be honest, that should have been expected as well, it was
:04:09. > :04:15.Hong Kong regularly tracks what is going on in the USA. We have also
:04:16. > :04:18.seen investors in Asia really breathing a sigh of relief that this
:04:19. > :04:23.decision that everyone has been waiting for for the entire year has
:04:24. > :04:29.finally been made, and taking some heart from the fact that the future
:04:30. > :04:33.rate rises are likely to be gradual. Remember that this is very important
:04:34. > :04:38.for emerging economies in Asia. Many of whom's currencies often
:04:39. > :04:42.depreciate once you see a US rate rise. You have seen the dollar
:04:43. > :04:46.flight in this part of the world, but it is at the top of many
:04:47. > :04:51.investors' mind how it will impact their currencies in the future. In
:04:52. > :04:58.terms of normal everyday people, you have been out there assessing what
:04:59. > :05:02.it means for them. Yes, Sally, it is a big issue for many businesses and
:05:03. > :05:07.consumers in Asia. Back to that currency problem, as the US rates go
:05:08. > :05:12.up, many currencies in the region can to fault. That is having an
:05:13. > :05:20.impact on businesses and consumers in the region. What do so milk,
:05:21. > :05:24.pudding, education and Star Wars have to do with the US Federal
:05:25. > :05:30.Reserve? The decision on interest rates is serving up worries for
:05:31. > :05:36.folks in many parts of age. Take this man. He owns a solo work --
:05:37. > :05:43.soymilk winning franchise. His currency will likely fall, and that
:05:44. > :05:50.is bad for business. We import our war materials from Singapore, so any
:05:51. > :05:59.currency fluctuations will affect us directly. -- wrote materials. We
:06:00. > :06:06.can't increase our prices as much. It is a competitive industry. Our
:06:07. > :06:10.costs keep rising higher and higher. It is more than just a business
:06:11. > :06:16.issue. These moves strike at the heart of Malaysia's middle-class,
:06:17. > :06:22.but this mother of two, both of her children bring overseas to
:06:23. > :06:34.university may no longer be possible. I will have to plan
:06:35. > :06:39.differently. We are thinking whether we can do anything more for our
:06:40. > :06:43.second child. This was once a booming economy, thanks in part to
:06:44. > :06:47.the cheap money that poured into this market. Now all of that has
:06:48. > :06:52.changed. In anticipation of higher interest rates in the US, investors
:06:53. > :06:56.have started pouring money out, which has had a knock-on effect on
:06:57. > :07:01.everything from the stock market to the currency. Malaysia is not the
:07:02. > :07:04.only country filling this pain. In Singapore, the concern is that
:07:05. > :07:09.higher interest rates could push up the cost of borrowing, and other
:07:10. > :07:12.countries like Indonesia, India and Australia may be affected as well.
:07:13. > :07:19.It is not the first rate rise that has people worried. More may be on
:07:20. > :07:23.the way. Whenever the US chooses to raise interest rates, it tends to be
:07:24. > :07:35.followed in a series of interest rate rises. From that point of view,
:07:36. > :07:41.even though we are very prepared, it can leave some element of surprise.
:07:42. > :07:45.What should not surprise you is that Star Wars, which premiered in Asia
:07:46. > :07:48.overnight, will dominate conversations this Thursday. The
:07:49. > :07:53.film is a reminder of how pervasive America's influence is here, and how
:07:54. > :08:03.much of a force the reserve bank is in this part of the world. In terms
:08:04. > :08:08.of reaction, the markets obviously stronger, but as I mentioned, the
:08:09. > :08:12.Hong Kong monetary authority has raised its base rate for the first
:08:13. > :08:17.time in nine years. The cost of borrowing going up following the
:08:18. > :08:22.move from the US Federal Reserve overnight. In Hong Kong, the
:08:23. > :08:25.currency is pegged to the US dollar, so the monetary authorities do tend
:08:26. > :08:31.to move in line with the Federal Reserve. That is not unexpected in
:08:32. > :08:35.itself, but the Hong Kong key rate has been raised to 0.75% from 0.5%.
:08:36. > :08:38.Argentina is to scrap foreign exchange restrictions,
:08:39. > :08:40.allowing individuals and companies to buy dollars freely
:08:41. > :08:43.The move comes six days after pro-business
:08:44. > :08:50.President Mauricio Macri took office promising deep economic reforms.
:08:51. > :08:53.capital leaving the country - but critics say they have hurt exporters
:08:54. > :09:02.The value of the peso is now expected to slump from less than 10
:09:03. > :09:05.to the dollar - the official exchange rate - to as low as 15,
:09:06. > :09:11.The price of the average UK home will rise by 50%
:09:12. > :09:14.in the next 10 years, according to a report by the National Association
:09:15. > :09:18.of Estate Agents and the Association of Rental Letting Agents.
:09:19. > :09:25.That would put the national average price at ?419,000 by 2025.
:09:26. > :09:27.London house prices are forecast to nearly double to ?931,000.
:09:28. > :09:31.The research assumes prices will continue to rise as they
:09:32. > :09:50.That is quite a scary thought. Let's show you the markets. You can see
:09:51. > :09:56.the reaction. This is the bounce back. Japan at almost 2%. The
:09:57. > :10:03.trading day in Tokyo is almost over. Oil is falling, just over $37 a
:10:04. > :10:07.barrel at the moment. That is the close on Wall Street. The comments
:10:08. > :10:12.about the jaw moves in the future but they boosted investor sentiment
:10:13. > :10:20.-- gradual moves. Sports activities for children
:10:21. > :10:23.as young as five are to receive more government funding
:10:24. > :10:25.as part of the first new government Sport England's remit is being
:10:26. > :10:30.changed, with more money going directly to charities and community
:10:31. > :10:34.groups to get people active.