How does the UK manage to keep its triple A credit rating?

#1
France is likely to be loosing its AAA credit rating soon, and yet, their situation isn't that different to ours. Their unemployment rate is similar to the British rate and their exports and manufacturing industry far exceed ours.

Frankly, on paper it should be the UK loosing its credit rating and not France. Yet the UK seems to maintain its credit rating all the time while other countries around us are being continuously downgraded.

I'm guessing its because the perception of the UK is a highly politically stable country with well-behaved, globalised politicians who would rather the country starved than not pay a debt back? Whereas countries like France, Greece, Spain, etc have fiery, hot-headed people with a fiercely independent streak who are just as likely to turn around and tell the lenders to **** off and not repay their debts. As a result, they are seen as more risky, less stable, volatile markets and thus they have lower credit-ratings.

Would you say this analysis is more or less correct?
 
#2
I pay over £500 a month in tax alone. It's easy to see how the useless ******* keep afloat. With cnuts like me paying them my hard earned cash whilst half the country sit on their arses watching Jeremy Kyle.
 
#3
you cant manipulate the Euro without doing it to all 27 members states, were as we can to the £, so we have flexibility to do so, but its a civi companies own view, so couldnt care less really about their persevered power
 
#4
Because we currently have a government who whilst are a bunch of cnuts they are currently cutting a fuckton of services because shock horror, we cannot afford them. The UK will lose it's rating when Labour return and promise sunshine and candy for everyone.
 
#6
Well,obviously someone,somewhere,cleverer than you and I,thinks their situation,isn't the same.

But,I would agree,that the countries you mention,are thieving bastards,who would borrow money,knowing full well that they can't pay it back,which means they're a bad credit risk,maybe ?:)
 
#7
France wanted us to loose our AAA rating, so if they loose their's. I'll laugh my cock off.
France and their hissy fit pointing at us was nothing short of a child running to tell on another child. Hence I am really hoping they lose their AAA rating.
 
#9
Its simple. The government came up with a financial plan early and are sticking to it.

The US were surprised at their loss of AAA, clearly thinking they were too big.

As for the Euro I suspect certain member states expected to crack on as normal and other members would stabilise the Euro.

This is why there is all the fuss about transaction tax for trading in the city. The Germans and French Et Al want it because it effects them less as no one does as much trading as the City of London. As a buy product, if a transaction tax is introduced its possible to drag the UKs AAA rating down and create a level trading field.

Hopefully Banker will be along to explain things better.
 
#11
I pay over £500 a month in tax alone. It's easy to see how the useless ******* keep afloat. With cnuts like me paying them my hard earned cash whilst half the country sit on their arses watching Jeremy Kyle.
Don't forget the lazy cnuts 5% pay rise.
 
#12
Because we currently have a government who whilst are a bunch of cnuts they are currently cutting a fuckton of services because shock horror, we cannot afford them. The UK will lose it's rating when Labour return and promise sunshine and candy for everyone.
I agree that the Tories have inherited a mess but how can they justify one one hand cutting services and pay for public sector workers, yet on the other hand agree to build a £33bn railway to get you to England's biggest shithole 19 minutes quicker, and give all the workshy a 5% payrise?
 

Wordsmith

LE
Book Reviewer
#13
Reduced to its most simlistic, the Bank of England can simply print money to pay the EUs debts (at the cost of high inflation). The Euro zone doesn't have that luxury.

In addition there are major structural flaws in the euro zone - not least that Club Med has lost (on average) 30% of its competitiveness against Germany - allowing Germany to export at will to Club Med and leaving club Med struggling to export to northern Europe (and the rest of the world).

Brown fcuked over the UK economy, but we still have a chance to pull back from the brink. The picture is less rosy in the Euro zone.

Wordsmith
 
#14
I would guess that those at risk of losing their AAA rating either owe/are owed lots of money and those who owe have;

- No clearly obvious means to pay back their debts
- No convincing plan to get back on track
- Might have a good plan on paper but no realistic hope of implementing it

Those who are owed lots of cash and at risk of downgrade depend on the first lot for their credit worthiness.

A downgrade means the ratings agencies consider (it is just an opinion they state) these countries to be high investment risk. They might be right or wrong but they are listened to and acted upon.

Those about to be downgraded squeal as they cannot borrow money as cheaply or have to pay higher returns on any of their own invesment opportunities such as soveriegn bonds.

We (the UK) at present are viewed as having a good plan that we will implement to meet our obligations, even at the expense of our own citizens. Whether you think it is a good plan or not is another matter. Greece et al also don't owe us as much as they do to France for instance.

Either way we might be in hoc as much as the troubled lot, but the view is we will pay back in full and on time.
 
#15
Credit Rating agencies base their evaluations on a set of assumptions about how likely particular nations are to pay their debts when due. It has nothing to do with the underlying strength or stability of the economy concerned.

The UK can pay its current obligations because its overall economy can be harvested to do so. It has a significant portion of its revenue from the tradable sector, rendering it uncomfortably vulnerable in the long run compared to countries with higher non-tradable sector involvement - but that's not a factor in the CRAs' assessments.
 
#17

Alsacien

MIA
Moderator
#18
France is likely to be loosing its AAA credit rating soon, and yet, their situation isn't that different to ours. Their unemployment rate is similar to the British rate and their exports and manufacturing industry far exceed ours.

Frankly, on paper it should be the UK loosing its credit rating and not France. Yet the UK seems to maintain its credit rating all the time while other countries around us are being continuously downgraded.

I'm guessing its because the perception of the UK is a highly politically stable country with well-behaved, globalised politicians who would rather the country starved than not pay a debt back? Whereas countries like France, Greece, Spain, etc have fiery, hot-headed people with a fiercely independent streak who are just as likely to turn around and tell the lenders to **** off and not repay their debts. As a result, they are seen as more risky, less stable, volatile markets and thus they have lower credit-ratings.

Would you say this analysis is more or less correct?
As long as the BofE keep buying UK gilts with no apparent limit, why would anyone doubt the government would have an issue financing itself in the medium term?
Same reason the Frogs have been banging on about the ECB buying bonds in the Eurozone, election year there.....
 

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