US default could cause 'worldwide recession'

Christine Lagarde, head of the International Monetary Fund, has sparked fears over the impact of a US default, warning it could cause a global recession.

Speaking on US television channel ABC, Lagarde said she feared a possible default could cause a major economic downturn around the world. "If there is that degree of uncertainty, that lack of disruption, that lack of certainty in the US signature, it would mean massive disruption the world over and we would be at risk of tipping yet again into recession," Lagarde said. The US Government has until 17 October to come to a solution about the US debt ceiling and avoid a default. Although there were talks over the weekend, politicians are said to be no closer to a decision. Lagarde also...