Britain loses triple A credit rating

Redz

Redz

Redz

Soldato
Joined
12 Jul 2008
Posts
2,813
Location
North West
Looks like we have been downgraded to AA1 status.

http://news.sky.com/story/1055827/britains-credit-rating-downgraded

I'm not an expert in economics, but it's my belief that the only reason we can handle our debt at the moment is because of the low (2%) rate of interest that we can borrow at at the moment. If we are less of a safe bet to lenders then they can insist on a higher rate of return. Which sort of screws us.

Hope this isn't the start of a downward spiral.
 
It was innevitible in my mind. The downward spiral started 10 to 15 years ago in my opinion too.
 
Didn't standard and poors not reduce our credit rating a couple of years ago?
It barely matters, now the wealthy and monied won't want to invest in a country they are currently not investing in.
Great.
 
The downward spiral started at least 60 years ago and possibly even earlier.

As has been commented much of this drop will have been priced into sterling as it has been coming for a long time. Interesting that borrowing costs have been lower than expected recently but I supposed we can wave goodbye to that now. Ultimately the question is no different to what is has been for the last 4 years.

Tax rises?

OR

Welfare cuts?

They are the only options. More borrowing will only delay the inevitable.
 
real question is - will anyone give a ****

look what happened when the US got downgraded... oh yeah **** all, people still treated US treasuries as though they were AAA regardless

while we're a smaller economy than the US I'm not sure its going to have a drastic effect on yields
 
However you look at it, it was a huge deal to George's tenure as Chancellor. The media will go mad., we are all screwed now lol!!!
 
Yey, credit agencies telling is the bloody obvious way after the markets cottoned on. Our weak economy hasn't warranted at AAA rating in years, nice for a credit agency to finally realise.
 
Burnsy2023 said:
, nice for a credit agency to finally realise.
Click to expand...

Hopefully now the government will too. As I stated in the OP, I'm not an expert in this field, but to my mind austerity measures just seem to maintain the status quo, they don't seem to be creating more prosperity.
 
I think i will no longer invest my moneys into the United Kingdom anymore, my safest bet now is to invest my money with my friend, a nigerian prince. :p

In reality very little will be done by the goverment as the cuts that need to happen would be unpopuler with the masses and they dont want to be voted out again.
 
Sky reporting
[There's] increasing clarity that, despite considerable structural economic strengths, the UK's economic growth will remain sluggish over the next few years," it said.
Click to expand...

and what moody's actually said
. The continuing weakness in the UK's medium-term growth outlook, with a period of sluggish growth which Moody's now expects will extend into the second half of the decade;
Click to expand...

As was mentioned, I doubt it will make a large impact on yields, similarly to when they downgraded the US, probably will bring risk aversion the next week though i reckon, we'll see on Monday.
 
Cut welfare, but also civil servants and councils buying ipads for example, slash foreign aid, child benefit for larger families (one unplanned is unfortunate, more than two is careless or reckless if you can't afford kids). Also get some travel lodge esq public housing rather than funding houses with low occupancy and not in the most expensive areas like london and south east.
 
Last edited:
Redz said:
Hopefully now the government will too. As I stated in the OP, I'm not an expert in this field, but to my mind austerity measures just seem to maintain the status quo, they don't seem to be creating more prosperity.
Click to expand...

The problem is, by borrowing more to try and stimulate the economy (which may or may not work and to an unknown extent), you may be making the problem worse.

Or you may get us out of a slump. I don't think anyone really knows the answer to this and the stakes are pretty high. I certainly don't know the answer.
 
Burnsy2023 said:
The problem is, by borrowing more to try and stimulate the economy (which may or may not work and to an unknown extent), you may be making the problem worse.

Or you may get us out of a slump. I don't think anyone really knows the answer to this and the stakes are pretty high. I certainly don't know the answer.
Click to expand...

Well that is the big question at the moment. Trying to model that as an economist is almost impossible due to all the exogenous factors facing the economy.

There's something to be said for both sides of the debate.
 
You must log in or register to reply here.
Back
Top Bottom