Monday, July 25, 2011

Prepare for a rough ride, US warns world stock markets

Global financial markets face “stressful days ahead”, the White House warned, as American politicians struggle to agree a deal to cut the country’s record debts.

President Barack Obama and senior politicians are locked in talks about tackling a problem which some experts fear could lead it to default on loan repayments.

America is due to reach its self-imposed borrowing limit of $14.3 trillion (£8.7 trillion) on August 2.

Ken Clarke, the former British chancellor, described the deadlock across the Atlantic as the “next iceberg”.

The outline of a deal to reduce spending is expected to be presented to Congress today and negotiations are likely to dominate the next week there.

Bill Daley, the White House chief of staff, warned that the talks were moving into “difficult days” and said it was crucial for the confidence of markets and businesses to get a deal soon. (more)