Global markets surge after ‘cliff’ deal

Global markets surged yesterday following the announcement that the White House and the US Congress had temporarily resolved the “fiscal cliff” that threatened to plunge the world’s largest economy back into recession.

If US authorities had not reached agreement then a series of swingeing spending cuts and tax rises would have been automatically introduced.

But analysts say the stock market rally will prove short lived because there are a number of looming political and economic hurdles that must be overcome before there is a durable recovery.