UK looses AAA rating

Oh dear, UK fortunes are not looking up.

Debt brings cruel downgrade to UK
4:00AM Saturday May 23, 2009
By Sean O'Grady

Britain has been relegated from the premier league of international economies by one of the world's leading credit agencies.

Standard & Poor's concerns about Government borrowing and the potential cost of rescuing the United Kingdom's rickety banking system - as much as £145 billion ($375 billion) - are so serious that the agency has taken the unprecedented step of downgrading the creditworthiness of the British Government.

Britain has lost its cherished AAA rating with a "stable outlook", the highest possible, to a triple-A rating with a "negative outlook".

Worse could follow. The agency said "UK public finances are deteriorating rapidly" and warned about a further downgrade: "The rating could be lowered if we conclude that, following the election, the next Government's fiscal consolidation plans are unlikely to put the UK debt burden on a secure downward trajectory over the medium term."

While only one word of the formal S&P rating has been altered, the implications of the change could hardly be more momentous. Sterling, the gilts market and the FTSE 100 index all fell sharply on the news, which came shortly after the Office for National Statistics announced the latest figures for Government borrowing - £85 billion in April alone, four times the level this time last year and described by one City analyst as "awful".

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The lower S&P rating means the national debt will be more expensive to service and generally add to the growing pressure on public spending. And the economy may not return quickly to the sort of growth that would restore tax revenues and prevent unemployment climbing to about 3 million by this time next year.
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Book Reviewer
I suggest that you amend the title of the thread as it is wrong. UK has not lost its AAA rating, it has been amended to show negative. A world of difference in terms of the cost of borrowing for UK plc!!


Book Reviewer
And it's been done elswhere on the forum too.
Thank god for that, I thought I was going to have to get an adaptor for my TV Remote batteries!!!

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