Moody's rating agency places UK on negative outlook

[denphone]

http://www.bbc.co.uk/news/business-17021986

The UK's top-rated AAA credit rating has been placed on "negative outlook" by US credit ratings agency Moody's.

It said its decision followed concerns over growth prospects and the possible impact from the eurozone crisis.

The move implies the UK has a 30% chance of losing its AAA credit rating within 18 months.

France and Austria have also been warned by Moody's over their top rating, and Italy, Spain and Portugal's ratings have been lowered.

"This is yet another organisation - in this case a credit ratings agency - warning Britain that if we spend or borrow too much we're going to lose our credit rating," UK chancellor George Osborne told the BBC.

"It was a reality check for the whole political system that Britain has to deal with its debts," he added.

[Osem]

....and there was I thinking that the UK was benefitting from some special treatment from US ratings agencies. Our AAA rating was the result of some form of insidious transatlantic bias/favouritism and therefore guaranteed in spite of the extremely harsh realities we're facing in terms of our own debt mountain and exposure to various EU hotspots.

The truth is that unless HMG delivers on its plans and promises our AAA rating will go the same way as so many others. Anyone who doesn't believe that will happen or thinks the ratings agencies have an interest in propping up UK PLC needs to wake up and smell the coffee.

[Gary L]

Cut more benefits?
or get the poor to pay some other way?

what chance do we have of getting the rich to help us out?

[joglynne]

A slightly fuller report of George Osborne's response to the threat of losing Britain's triple-A credit rating can be read here.

http://www.gfmag.com/latestnews/late...id=1.2727507E7and here http://www.londonstockexchange.com/e...38740A&lang=en

Speaking to the BBC, Osborne said he is determined not to waver in his plan to cut the budget deficit and repeated his view that it isn't possible to generate growth without cutting government debt.

"The idea that I've abandoned growth is nonsense," Osborne said. "I don't see a false choice between dealing with our debts and growth."

Moody's have also said

"Although Moody's sees rising challenges in achieving debt reduction within the timeframe that has been laid out by the Government, not least the possible impact of any future cutbacks on short-term growth, the rating agency believes the UK Government's response to negative developments late last year indicates its commitment to restoring a sustainable debt position. This suggests the UK's track record of reversing increases in debt is likely to continue going forward."