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US fails to avert its 'fiscal cliff'

US politicians have failed in their latest attempt to avert the so-called fiscal cliff, which economists say threatens to send the country back into recession.

A vote on a Republican bill to limit tax rises to those earning more than $1m (¤750,000) a year was abandoned in the House of Representatives due to a lack of support.

The development foiled attempts to head off $600bn (¤455bn) worth of tax hikes and spending cuts that could push the US economy into recession in 2013.

President Barack Obama has pledged to work with congress to stave off the tax increases and spending cuts if a deal cannot be reached.