President Barack Obama and senior politicians are locked in talks about tackling a problem which some experts fear could lead it to default on loan repayments.
America is due to reach its self-imposed borrowing limit of $14.3 trillion (£8.7 trillion) on August 2.
Ken Clarke, the former British chancellor, described the deadlock across the Atlantic as the “next iceberg”.
The outline of a deal to reduce spending is expected to be presented to Congress today and negotiations are likely to dominate the next week there.
Bill Daley, the White House chief of staff, warned that the talks were moving into “difficult days” and said it was crucial for the confidence of markets and businesses to get a deal soon.
“In the end, we may have a few stressful days coming up – stressful for the markets of the world and the American people,” he said.
Timothy Geithner, the US treasury secretary, said it was “unthinkable” that America would “not meet its debt obligations”.
He indicated that a deal could be reached to delay major decisions for 18 months, until after the next presidential election. Should America fail to tackle its debt crisis, Britain faces the prospect of another international economic meltdown in the next fortnight, senior Cabinet ministers said.
Politicians had hoped that last week’s eurozone deal would calm market nerves but the situation in Washington is set to renew turbulence.
The stock market in London may fall today if US politicians do not indicate progress on a deal to cut federal spending or raise taxes.
Vince Cable, the Business Secretary, called yesterday for the Bank of England’s £200 billion quantitative easing programme to be extended amid separate concerns that the British economy has stagnated, and may even fall back into recession.
Official figures are expected to show tomorrow that it grew only marginally between April and June.
In an interview yesterday, Mr Cable said that further emergency actions may be necessary.
“It isn’t great,” he said. “It isn’t surprising it isn’t great because of the problems we inherited in the aftermath of the banking collapse and the recession, the unsustainable boom.
“We have got chronic finances and difficulties in Europe as well.”
The Business Secretary was asked whether the Bank should increase quantitative easing, to which he replied: “The Bank of England is an independent body, we need to stress that. They need to make their own judgments — but it is about the Bank of England pursuing policies of low interest rates, keeping our exchange rates down, but also using quantitative easing, perhaps in more imaginative ways, not just acquiring government securities.
“But it is for them to form the judgment on what they do on that.”
Mr Cable added: “There are members of the monetary policy committee that have floated different ideas about how you do quantitative easing – we get into very technical issues here – but it is for them to form their own judgment.
“But I think that if we have a continuing problem of weak demand that is the way to deal with it.”
The Labour Party and some Conservative MPs believe that Britons should be offered tax cuts to encourage them to spend and kick-start the economy.
However, Mr Cable ruled out any relaxation of “fiscal discipline” by the Coalition, which has increased taxes including VAT to raise money to help pay off Britain’s own record debts.
This week, David Cameron is expected to focus on the economy and enterprise amid growing concern over lacklustre growth.
A survey of economists predicted that growth in the second quarter would average just 0.2 per cent. Some think the economy may have shrunk.
Ministers will outline measures to cut red tape and help entrepreneurs, but a number of experts believe more drastic action will soon be required. George Osborne, the Chancellor, will today unveil new trade deals with India.
Mr Clarke, the former chancellor who steered the recovery from the 1990s recession, said it could take four years for the economy to return to normal.
He welcomed last week’s European Union bail out to rescue Greece and shore up other beleaguered economies, but said: “I think the icebergs are probably the worst in the lifetime of anyone now living and we did have some good news last week – we have had some very weak leadership in Europe, but at last they demonstrated they were able to reach a political decision.
“We are now waiting to see if the American political class can do the same thing in the next fortnight or so and if they don’t do it by early August that is the next big iceberg coming towards us.”
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