Deal to break US debt crisis deadlock ‘near’

US politicians are at loggerheads over raising the US debt ceiling – which must be done by tomorrow to avoid a default, effectively meaning the country will not be able to pay its bills.

However, reports emerging from the US suggest Democrats and Republicans are close to a deal.

Republican Senate leader Mitch McConnell told reporters there was “a level of seriousness with the right people at the table” as talks continued, while senior Senate Democrat Richard Durbin spoke of “a more positive feeling”. Republicans have been pushing for the White House to agree a plan to reduce the deficit by cutting public spending before they will agree to raise the debt ceiling.

While Democrats agree that the deficit must be cut, they would prefer do so through a mix of spending cuts and tax rises rather than spending cuts alone.

President Barack Obama’s administration and the Republican Party are discussing a plan to raise the government’s debt ceiling of 14.3 trillion US dollars (£8.7 trillion) by about 2.4 trillion US dollars (£1.3 trillion), enough to last through next year. The uncertainty over the showdown has hit global markets including the FTSE 100 Index, which has posted considerable losses in recent weeks.