The chairman of the US Federal Reserve yesterday credited growing productivity with an important role in the US economic boom, but cautioned Wall Street to be prepared for a change. "The rate of growth of productivity cannot increase indefinitely," Mr Alan Greenspan said to the Joint Economic Committee of Congress. "While there appears to be considerable expectation in the business community, and possibly Wall Street, that the productivity acceleration has not yet peaked, experience does advise caution."

The Federal Reserve is expected by many analysts to raise interest rates at its next policy meeting at the end of the month. Innovations in technology and more efficient operations were the main factors in the productivity gain, Mr Greenspan said. Outside the farm sector, output for every hour worked had grown about 2 per cent a year since 1995, he said. A number of technology-aided factors were encouraging competition and keeping prices down, he said.