Republican negotiators have stormed out of crunch talks to raise America's debt ceiling as they branded Democrat demands “unreasonable”, throwing fresh doubt on a deal to avoid default.

A spokesman for House speaker Kevin McCarthy said talks were on “pause” just hours after Joe Biden cut short a dinner with Rishi Sunak and other world leaders to focus on negotiations.

US stocks fell sharply as reports emerged that Mr McCarthy had left a closed-door meeting with White House representatives shortly after arriving on Friday morning.

The S&P 500 and Dow Jones erased gains made earlier in the day, while yields on US short-term debt also spiked.
Republican Congressman Garret Graves said he did not know when talks would resume.

He told reporters: “Look, they’re just unreasonable. Unless they are willing to have reasonable conversations about how you can actually move forward and do the right thing.

“We’re not going to sit here and talk to ourselves.”