President Joe Biden and Republican House speaker Kevin McCarthy have moved closer to a two-year deal to limit government spending and avert a US debt default, raising hopes of an end to the fiscal stand-off in the world’s largest economy.

People familiar with the potential agreement said that negotiators were looking to finalise the agreement in the coming days, ahead of a looming deadline of June 1 deadline when the US could run out of cash to pay all of its financial obligations.

Over the course of the day on Thursday, both the White House and Republicans on Capitol Hill suggested the talks were in a better place, though nothing had been concluded. If a deal is reached, it still would face potentially hair-raising votes in a narrowly divided Congress for it to be sent to Biden for his signature, a situation that could extend the uncertainty over the US’s fiscal future well into next week.