US debt ceiling: Democrats and Republicans agree deal in principle, Joe Biden says

The White House and the Republicans have agreed in principle to raise the US debt ceiling and avert a default after weeks of bitter negotiations.

The deal still needs to be approved by a divided US Congress.

President Joe Biden described the agreement as a "compromise", while House Speaker Kevin McCarthy said it "has historic reductions in spending".

The US Treasury earlier warned the country would run out of money to pay its bills on 5 June without a deal.

Such a default would upend the US economy and disrupt global markets.

The US must borrow money to fund the government because it spends more than it raises in taxes. read more