Global economy on the edge of ‘cataclysmic’ recession as US faces debt default
Experts are warning of the dangers posed by the dispute in the US Congress over the country’s $31.4trillion (£25.2trillion) debt default which may lead to a “cataclysmic” recession.
Politicians from across the aisle are working on a deal to borrow more money, which is otherwise known as raising the debt ceiling.
Speaking to the BBC, Simon French, chief economist at investment bank Panmure Gordon, warned of the “cataclysmic” consequences of a debt ceiling default.
Mr French explained: “It would make the global financial crisis look like a tea party.”
He added: “It would be pretty cataclysmic.”
In 2007-08, the global economy was impacted by the near collapse of the world’s banking sector which resulted in a recession.
Author: Patrick O’Donnell, Personal Finance Reporter, The Express
Managing Director, Head of Research