The U.S. Senate has officially voted to raise the debt ceiling, narrowly averting a catastrophic default

Just two weeks before the United States’ debt ceiling was reached, lawmakers have agreed to extend the limit.

The ongoing debate between Republicans and Democrats has sent shockwaves through the markets over recent times… with fears the government would default and shut down.

The implications of a default would be severe and wide-ranging… but Senate Majority Leader Chuck Schumer says lawmakers have finally reached a deal.

The deal came after hours of negotiations into the night… and Senators could vote on the agreement as soon as Thursday.

Currently, debt in the U.S stands at around $28 trillion

The agreement is likely to increase the debt ceiling by $480 billion, which would extend it until December 3.

Senate Minority Leader Mitch McConnell confirmed during a floor speech that they had reached a deal.

The agreement comes less than two weeks before 18 October, the day the US Treasury Secretary Janet Yellen warned was the deadline to prevent the first ever US default.

The temporary debt compromise will still need to be passed by both chambers of Congress, and US lawmakers will still have to address this issue near the new December deadline to avert a default.

Should the United States have defaulted on its debts, analysts say it would severely hurt the country’s credit rating resulting in the global financial system being plunged into turmoil and possibly lead to a self-inflicted recession.