The chairman of the US Federal Reserve has signalled that persistently weak inflation will prompt the central bank to slow down its path of interest rate rises even as economic growth remains robust.

Janet Yellen said the world's biggest economy was healthy enough for policymakers to move forward with its plan to raise rates and start shrinking its $4 trillion balance sheet.

However, the chairman suggested that "uncertainty" surrounding whether stronger growth and a robust jobs market will generate price pressures meant future rate rises could be more gradual than the path set out last month.

It came as the Bank of Canada raised its interest rates for the first time in seven years.

In a widely expected move that analysts believe will be followed by a further rate hike this year, the Canadian central bank lifted its benchmark rate to 0.75pc, from 0.5pc, citing a robust economy fuelled by household spending.

It said future tightening would be data dependent, though it downplayed recent weak inflation readings.