What is the US debt ceiling and what would happen if it is not raised?

A deal between the White House and US House speaker has been agreed in principle, but still needs to pass a divided US congress

Joe Biden and the House Republican speaker, Kevin McCarthy, have reached a deal in principle" to raise the federal government's $31.4tn debt ceiling, potentially averting an economically destabilising default on 5 June.

With any new agreement still required to pass through a divided Congress, the risk that the Treasury department runs short of money to cover all its obligations does however remain.