Thursday, 21 May 2009

The downgrade is coming

From Today's Times:

Standard & Poor’s (S&P), one of the world’s two main ratings organisation, reaffirmed that its credit rating for Britain’s government debt remained at so-called “triple A” status, a gold-plated standard that is the highest available. But S&P fired a warning shot at the Treasury when it revised its outlook on this assessment from “stable” to “negative”.

The downgrade is in the post. When Darling and Brown cranks up the deficit, the UK's credit rating will slide.


sobers said...

This is all part of the softening up process to explain to the 'people' why we are going to have to go cap in hand to the IMF at some point in the next year or so. Expect more stories about ratings downgrades, explanatory pieces on 'what does the IMF do?' and general bits of info to ease our descent into the poorhouse. All designed to point out its those nasty foreigners who have downgraded our debt, and won't buy our bonds or sterling.

Of course it won't be Labour's fault, especially if you listen to the Beeb!

Anonymous said...

1695 July 17th the Royal Bank of Scotland was formed and New Rome on the Potomac was but a glint in the eye of the Vatican. One might wonder what happens around a similar date this year as it would be 100 Pi cycle years between the two dates...could this also match in well with the credit downgrade of the UK and the fall of RBS?

Exactly 314.2 years ago last tuesday Sir Trevor John was forced to step down as House speaker in the parlaiment. This is one grand Pi cycle.

1696, recoinage occured in the UK by John Locke and Isaac Newton.

Nothing is by is just time.

One imagines the King is rueing the day he gave the peasants computers.

Mark Wadsworth said...

It's a mystery to me (and to many others) how you can downgrade a government's CREDIT risk, if that country has borrowed in its own currency and can always repay bonds by printing notes if necessary.

Yes, this will cause hyper-inflation and so on, but that is a different type of risk.

Anonymous said...

Mark, in particular, the generous BoE managed to shift yield increase onto sterling devaluation by letting the foreign gilt holders get out.
Nobody left apart from the UK pension funds.....