Biden and McCarthy reach ‘in principle’ deal to raise debt ceiling days before US default

Agreement will reportedly raise debt limit for two years, but deal still needs approval from a divided US congress

Lawmakers in Washington were busily drafting legislation on Sunday after Joe Biden and the House Republican speaker, Kevin McCarthy, reached a deal in principle on Saturday night to raise the federal government's $31.4tn debt ceiling, with just days left before America was expected to default.

There was a slim chance that a bill could be finalized as early as Sunday and be presented on Capitol Hill, where it is expected to have a stormy passage in a divided Congress.