IMF's Lagarde warns on U.S. default or downgrade

NEW YORK, July 26 (Reuters) - A U.S. default or significant credit downgrade would be a "very, very serious event," Christine Lagarde, the new head of the International Monetary Fund, said on Tuesday.

Lagarde, who began as the IMF's managing director this month, warned that the consequences of such events would be far-reaching and would not stop at U.S. borders. She was speaking at the Council on Foreign Relations.

Lawmakers in Washington edged closer to a U.S. default on Tuesday as Republicans and Democrats were deadlocked over competing plans to narrow the country's deficit and raise its debt ceiling by an Aug. 2 deadline. For more see [ID:nN1E76P002] and [nUSBUDGET]. (Reporting by Lesley Wroughton and Jonathan Spicer; Editing by James Dalgleish)