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Slight recovery in European stocks

Global shares on the rise following US interest rate freeze.

European stocks have responded positively to the US central bank's announcement that interest rates are likely to remain on hold until 2013.

Signs that the Federal Reserve are implementing growth strategies led to gains of between one and two per cent in European bourses. London's FTSE 100 share index was up by 1.4 per cent.

The news comes at a time when positive growth in other parts of the global economy is also taking place. Following Tuesday's statement, US shares closed up four per cent and Asian markets continued to show gains of between one and two per cent.

The US interest rate currently ranges between zero and 0.25 per cent. As well as the welcome news surrounding interest rate freezes, the Federal Reserve posited the possible introduction of further quantitative easing methods in order to stabilise the global economy.

The US economy has suffered serious blows in recent days following the ongoing debate between Republicans and Democrats over whether to raise the US debt ceiling. Standard & Poor's downgrading of the US credit rating from triple A to AA+ for the first time added to fears that the world's biggest economy was heading for recession.

Despite putting interest rates on hold, analysts have made it clear that such fears persist. There is still a long way to go before the falls of recent weeks are in any way close to being recovered. Ongoing eurozone volatility has provoked analysts to reassess economic and corporate profit growth estimates. Although recent growth figures offer a glimpse of reassurance, longer-term uncertainty over US and European economies prevails.

Tess Riley is a freelance journalist and social justice campaigner. She also works, part time, for Streetbank, and can be found on Twitter at @tess_riley