Markets jittery over US debt deal

DESPITE the US Government nearing completion of its deal to up its borrowing limit and temporarily avert defaulting on its debt, international markets reacted nervously to Stateside news yesterday.

The raising of America’s debt ceiling may end the immediate risk of a US default — which would surely plunge financial markets and economies around the world into turmoil — but analysts were yesterday suggesting that it wouldn’t go far enough to secure the US the top AAA credit rating.

Added to that, weak US manufacturing data published yesterday — showing a 4.4% decline in July activity to a two-year low — kept international markets jittery and added to concerns that the American economy is still only on a slow track to growth.