Fed likely to avoid rate hike before Britain votes on leaving EU

Washington

THE US Federal Reserve may be forced to delay a rate hike at its June meeting because of mounting concern over the economic fallout from Britain's vote on whether to leave the European Union.

The geopolitical risk likely will push any rate increase until at least July, despite apparent consensus among Fed officials that a hike is warranted by stronger US growth and tight labour markets.

The Fed's June 14-15 rate-setting meeting comes just a week before the British vote on June 23. A "leave" vote is expected to roil financial markets, cause credit spreads to widen, trigger a rush into safe assets and bolster the dollar.

The dollar's recent stability is one reason the Fed has become more comfortable with raising rates, and officials may want to let the th…