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S&P sees higher chance of US fiscal cliff, but still slight
November 8, 2012 / 8:28 PM / 5 years ago

S&P sees higher chance of US fiscal cliff, but still slight

NEW YORK, Nov 8 (Reuters) - Standard & Poor’s on Thursday said it sees an increasing chance that the U.S. economy will go over the so-called fiscal cliff next year, though policymakers will probably compromise in time to avoid that outcome.

Analysts at the credit ratings agency now see about a 15 percent chance that political brinkmanship will push the U.S. economy - the world’s largest - over the fiscal cliff.

“The most likely scenario, in our view, is that policymakers reach sufficient political compromise in time to avoid most, if not all, potential economic effects of the cliff,” S&P analysts wrote.

The automatic spending cuts coupled with significant tax increases in January could take an estimated $600 billion out of the U.S. economy and push it into recession, according to the non-partisan Congressional Budget Office’s assessment of the fiscal cliff.

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