The chairman of the Federal Reserve has warned that the battle to contain inflation is not over as the US central bank raised interest rates to their highest level since 2001.

Policymakers voted to raise interest rates by a quarter of a percent to between 5.25pc and 5.5pc, piling fresh pressure on the Bank of England to do more to stamp out soaring inflation.

US stock markets rose after chairman Jerome Powell said policymakers had already covered “a lot of ground” after raising rates from near-zero starting last year.

However, he left the door open for further rate hikes, adding there was a “long way to go” before policymakers could be certain they had vanquished inflation.