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The United States Federal Reserve board has voted to maintain its interest rates at 5.25 per cent, as expected by most analysts.

In an accompanying statement released this evening the board said its primary concern remained upward inflationary pressures. Economic growth, though moderate, looked like being unperturbed by recent volatility, it explained.

The statement acknowledged that unstable financial markets, "tighter" credit conditions for businesses and households and the "housing correction" were keeping growth down but said "a sustained moderation of inflation pressures has yet to be convincingly demonstrated".

The failure of the American sub-prime mortgage market has troubled many economists and some have said its effects could begin to widen to restrict progress in the world's biggest economy.

But analysts believed third-quarter earnings will be more likely to provide an indication of the difficulties caused by the sub-prime situation and that the current uncertainty lies behind the Federal Reserve choosing to sit on the fence for now.

"So far the sub-prime crisis has been a financial rather than an economic event, but we are watching very closely for signs of the deterioration in the housing market having any impact on consumption and hence wider economic activity," Dave Chappell, fund manager at Threadneedle Investments, said.

"The US consumer has weathered previous storms very well, but we are not being complacent," he added.