US lawmakers warn fiscal cliff would cause recession

If the US was to go off the fiscal cliff at the end of the year it would lead to a recession in the world's largest economy, the country's Congressional Budget Office (CBO) has warned.

Ahead of a series of urgent meetings to be held in the US, the CBO has warned politicians if they fail to resolve the fiscal cliff it would knock 3% off GDP, plunging the US back into recession. The CBO's report - which is assessing the damage the end of a series of Bush-era tax cuts would have on the economy - also warned unemployment would rise to 9.1% by the end of next year if nothing was done. Such is the risk posed to the US economy that many commentators expect politicians to come up with a solution to the fiscal cliff before the end of the year. However, there remains a cha...