US could default on debt by end of February, warns Treasury secretary


US Treasury secretary Jack Lew has issued a warning that the US could default on its debt by the end of February.

The debt ceiling was originally suspended by the US government back in October 2013 in order to end the US government shutdown but the $16.7bn (£10.2bn) limit is set to be reinstated this Friday.

Speaking yesterday in Washington, Lew warned that the US will not be able to meet debts unless Congress increases its borrowing limit.

“Without borrowing authority, at some point very soon, it would not be possible to meet all of the obligations of the federal government,” he said.

He does acknowledge that the Treasury could use emerging measures, such as accounting mechanisms, as a way of paying US debts until the end of February following the reinstatement of the limit this week.[Full article]