The US Federal Reserve needs to get on with breaking the ice on frozen interest rates, in order to signal that the financial state of emergency is finally over, a leading Scottish investment house has said.

The Fed’s failure to lift rates last week has only served to spark unjustified pessimism over world economic growth, Kames Capital’s chief investment officer Stephen Jones has said.

He was commenting on the latest bout of volatility to shake stock markets, with the FTSE-100 dipping below the 6000 level on Tuesday before retracing much of its loss yesterday.

Kames manages £52billion and employs 250 of its 300 workforce at Edinburgh Park.

Mr Jones said the Fed’s timing risked becoming a problem in its own right. “I think it matters because it will signal to the market and to us that an emergency level of policy is no longer appropriate. I think they would have been better off signalling that and saying we are normalising. The fundamentals might not be super-hot but there definitely was a case to start raising rates as an affirmation of that....we should be moving on rather than continuously debating it.”

Mr Jones went on: “Some of the catalysts for the disruption in the summer have definitely become weaker, and the fact they didn’t seem able to raise rates has perturbed the market. They set it up to go, and hesitated, and not taking the opportunity she had has created uncertainty.”

He said the strength of the dollar had abated, US employment data was healthy, and growth was strong in both the US and UK. In Europe, Spain, Italy and Germany were all showing improvement and quantitative easing had another year to run. “Some of the actions we have seen in emerging markets and China have begun to stabilise the situation, maybe not allow the market to romp ahead but I think equity markets should not be taking fright, I think the macro picture is OK.”

Mr Jones said it was commodities that were weighing on the markets, but more cash in people’s pockets should boost the consumer sector while low inflation would keep a lid on interest rates. “In the UK when we come to raise rates, sometime next year after the US has moved, the glide path will be very shallow.”

Market volatility was here to stay, the investment chief said. “Investors need always to keep in mind their long-term objective...and perhaps stagger some investment decisions to ensure they are not just jumping in at one particular point. But with the market down at 6000, we think that looks like not bad value for the earnings that are probably going to be delivered. There is also a gentle amount of M & A going on, to think about.”