Investment veteran Warren Buffett has said the chances of the US slipping back into recession are very low, despite fears over the fiscal cliff facing the country at the end of the year.
Buffett, the billionaire investor and chairman of Berkshire Hathaway, ruled out a recession in the US unless "events in Europe develop in some way that spills over here big-time."
Concerns have been growing over the health of the world's largest economy after US GDP growth was revised down from 2.2% to 1.9% in the first quarter, following a relatively strong start to the year.
Fears are also mounting over the impact of the end of a series of Bush-era tax cuts. The economy is expected to shrink 1.3pc in the first half of 2013 if a mix of tax increases and spending cuts currently scheduled all come into force at the end of the year, the Congressional Budget Office (CBO) has warned.
However, Buffett said the US had a 'system that worked' in its current state, and barring a major catastrophe in Europe, he said the chances of a return to recession were 'very low'.
The US stock markets made positive gains yesterday after Buffett's comments. The Dow Jones was up 2.37% to 12,414, while the S&P 500 gained 2.3% to 1,315 and the Nasdaq jumped 2.4% to 2,844.
Buffett also criticised the European Union structure, which he labelled as "half in, half out", according to the Telegraph.
"They are in on a common currency but they are not in on a common fiscal policy or a common culture or common labour practices," he said at an event hosted by the Economic Club of Washington. "It cannot be half slave and half free. European leaders need to resolve some of the union's weaknesses."
Buffett, worth around $44bn, is hosting his annual charity power lunch for San Francisco based charity GLIDE soon. Bidding for a place at his table is due to start this Sunday. Last year's winning bid, made via eBay, set a world-record at $2.6m.
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