President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House yesterday.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides were still far apart.

The stand-off has forced Mr Biden to cut short a foreign trip.

Without a deal, America could enter a calamitous default on its £25trillion debt as soon as June 1.

Mr Biden said yesterday's hour-long Oval Office meeting was "good, productive".

'Deal possible this week'

Mr McCarthy told reporters he believed a deal was possible by the end of this week.

He told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that "the structure of how we negotiate has improved".

In exchange for support for raising the debt ceiling, Republican leaders are demanding budget cuts.

They also want tougher work requirements on government-aid recipients.

Mr Biden has repeatedly said that a potential debt default and budgetary issues should be separate.

Unable to borrow more

Reaching the debt ceiling means the US Government is unable to borrow any more money.

The BBC says a default - which would be a first in the country’s history - could up-end global financial markets and shatter trust in America's political ability to pay its bills.

Experts have warned it could also see the US spiral into recession and stoke unemployment.

Treasury Secretary Janet Yellen said at an event on Tuesday that "a US default would generate an economic and financial catastrophe".

The US debt ceiling has been raised, extended or revised 78 times since 1960.

FTSE 100

The UK's top share index, the FTSE 100, was down 24 points at 7,727 shortly after opening this morning, following yesterday's 26-point loss.

Brent crude futures were 0.55% lower at $74.50 a barrel.

Companies reporting today

  • Full-year results: British Land, JD Sports Fashion

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