Borrowing puts UK's AAA rating in danger after Budget 2009

[AtW]

The prospect of the UK losing its AAA sovereign credit rating, resulting in higher interest rates for companies and households, moved a step closer after ratings agencies voiced fears about the UK's vast public debt burden.

Moody's and Standard & Poor's are reviewing the UK's rating in light of the Chancellor's revelation in the Budget that national debt will reach £1.4 trillion over the next five years. Spain, Ireland, Greece and Portugal have already been downgraded.

Arnaud Mares, lead analyst at Moody's for the UK, said: "Treasury projections that public sector net borrowing will remain above 5pc of GDP five years from now... are a cause for concern. This suggests that fiscal policy will have to be tightened much further than currently envisaged. The alternative would be that the Government chooses to live with a permanently higher debt burden which would likely have rating implications over time."

More here: http://www.telegraph.co.uk/finance/f...dget-2009.html

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Well, that'll "help" pound and inflation here...

[TheRefactornator]

It must be true http://www.thedailymash.co.uk/politi...-200904231723/

[M_B]

http://www.guardian.co.uk/business/feedarticle/8471747

LONDON, April 24 (Reuters) - Credit rating agency Moody's said on Friday that its triple-A rating for British government debt was not under review.
"Note that the UK rating is Aaa, with a stable outlook -- the rating is not under review," said Moody's spokesman Francesco Meucci.
Britain's Daily Telegraph newspaper had said in an article on Friday that Moody's and rival credit rating agency Standard & Poor's were reviewing their ratings for British sovereign debt after finance minister Alistair Darling's 2009/10 Budget, which forecast record borrowing.
A spokesman for Standard & Poor's said its analysts were still examining the Budget, and had no further comment on the Telegraph story.
"We are looking at the details of the budget and can't comment further at this stage," the spokesman said.
S&P also rates Britain as triple-A, the highest credit rating, with a stable outlook. (Reporting by Christina Fincher and David Milliken)

[chef]

"Yields on 10-year gilts rose nine basis points to 3.52pc following Wednesday's 12-point increase, indicating that it will cost the Government more to raise the money it needs." oh f##king great, more money spent

"Rising gilt yields also threaten to undermine the Bank of England's policy of quantitative easing – an attempt to reduce long-term interest rates and make corporate debt more affordable." brilliant, more bad news

"The Bank is buying back £75bn and has the option of purchasing another £75bn from the end of June to help absorb the oversupply of gilts and so keep rates down."

jesus christ, why is the BoE and this government so goddam stupid? as far as I can see they quite simply f##k up every fiscal policy they ever touch

[Menelaus]

Election. Now, please.

When people were talking earlier in the year about middle-class rioting in the streets in summer 2009 I thought that it was a somewhat flippant concept. Now? Not so sure.

[ThomasSoerensen]

Also how can BoE lend at 0.5% (or whatever the official interest rate is today) while issued bonds require 3.5% interest payments before some foreigner will invest in the UK?

Do they not see it as a problem that the UK is working on a negative interest margin?

[suityou01]

Election. Now, please.

When people were talking earlier in the year about middle-class rioting in the streets in summer 2009 I thought that it was a somewhat flippant concept. Now? Not so sure.

According to Gerald Celente (aforementioned predictor chap in Thoughtful doom thread) this is the plan, to bankrupt us and US so we have to bring in a global currency.

Methinks this might take years, unless things truly trul collapse. Again can't see how that could happen because we just seem to borrow more money from more and more distant future generations.

Again Celente and others says this is the plan, for global enslavement.

[Mich the Tester]

Are Moodys and Standard&Poors the experts who told the banks that US subprime mortgage funds were AAA grade solid gold investments?

[AtW]

Are Moodys and Standard&Poors the experts who told the banks that US subprime mortgage funds were AAA grade solid gold investments?

numpties

Allegedly.

They might be right this time however - UK is certainly not AAA level, there are bugger all assets to sell off in case of bankrupcy: the Govt itself does not own much, apart from debts.

[Andy2]

Are Moodys and Standard&Poors the experts who told the banks that US subprime mortgage funds were AAA grade solid gold investments?

and why they are still in business and not charged for their incompetence