Moodys has threatened to take away Britain's AAA credit rating. The only upside is that Britain isn't the only country being primed for a rating cut. France and Italy are also up for the chop.
Do we deserve the ratings downgrade? The fiscal deficit remains painfully high, public sector indebtedness is growing and the economy is slowing. The central bank is printing money to keep down UK government yields. Private firms are paying back their loans, thus supressing investment, the key ingredient of a post crisis recovery. Unemployment remains high, inflation is around 5 percent and the housing market is slowly deflating.
Can anyone give a single reason why the UK should keep its triple-A rating?