US deficit 'hits record $1.4tn'

The US budget deficit more than tripled to a record $1.4 trillion (£877bn) in the year to 30 September, according to US Congress estimates.

Congressional analysts had previously predicted a deficit of $1.6tn but revised their latest estimate, which comes after the end of the fiscal year.

The huge deficit was put down to increased government spending and a big drop in tax revenues.

The Treasury Department will report the actual deficit later this month.

The Congressional Budget Office (CBO) said the deficit was equal to 9.9% of gross domestic product (GDP).

The previous record deficit was $459bn, set last year.

The CBO said the increased spending was due in large part to the government’s Troubled Asset Relief Program, the $787bn economic stimulus and the rescue of mortgage giants Fannie Mae and Freddie Mac.

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