US Treasury Secretary Steven Mnuchin admitted to Congress on Friday that the government will reach its $22tn borrowing ceiling in autumn. This development adds to global economic volatility, amid a Sino-American trade war and the threat of a no-deal Brexit.

With a short letter to the Democratic speaker of the House of Representatives, Nancy Pelosi, Mnuchin warned that the Congress may have to take legislative action to increase the debt ceiling before its August recess. Both the Congress – with a Democratic majority – and the Senate – with a Republican majority – must concede to raise the level of debt.

Unless both Houses agree to raise the level of US debt, the Federal government runs the danger of default. The earlier than anticipated budgetary problem reflects weaker than expected Federal Revenue, due to a combination of slower growth and the 2017 tax reform that slashed corporate tax.

Ms Pelosi said last week that she is keen to secure an agreement on the debt limit, providing the Republican side offers to compromise on policy. Democrats are unwilling to fund a border wall with Mexico and want further concessions on abortion legislation.