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US Deficit Deal

United States President Barack Obama has finally announced that Republican and Democratic leaders have reached an agreement on raising the US debt limit and narrowly avoided defaulting on their financial liabilities. 

United States President Barack Obama has finally announced that Republican and Democratic leaders have reached an agreement on raising the US debt limit and narrowly avoided defaulting on their financial liabilities.

The proposal still needs to be approved by Congress, but will see the US debt ceiling increase by up to $2.4tn from the current $14.3tn. In return, the US government deficit will be reduced by a similar amount over 10 years.

Both of the US houses of Congress are expected to vote on this crucial proposal on Monday. It is by no means a plain sailing from here though with Republicans and Democrats in the House of Representatives remaining opposed to different aspects of the deal calling for tougher spending cuts or greater tax hikes. 

This ongoing battle between the parties has made it a nervous week for stock markets around the world but they have broadly risen today on the news that a settlement may now be near. 

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