Moody's and S & P to review the UK's AAA rating after the 2009 budget.

inspector_monkfish

10:48 24Apr09 MOODY'S SAYS OUTLOOK ON UK'S AAA RATING STABLE, NOT UNDER REVIEW
10:56 24Apr09 Moody's say UK credit rating not under review

LONDON, April 24 - 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.

Rochdale_Pioneers

So the Telegraph were talking cobblers in an attempt to talk down the economy for political reasons? There's a surprise.

Expect their coverage of the non-news of our non-move in rating to be "UK escapes downgrading" or some other nonsense.

Snooze

inspector_monkfish wrote: »

10:48 24Apr09 MOODY'S SAYS OUTLOOK ON UK'S AAA RATING STABLE, NOT UNDER REVIEW
10:56 24Apr09 Moody's say UK credit rating not under review

LONDON, April 24 - 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.

inspector_monkfish wrote: »

10:48 24Apr09 MOODY'S SAYS OUTLOOK ON UK'S AAA RATING STABLE, NOT UNDER REVIEW
10:56 24Apr09 Moody's say UK credit rating not under review

LONDON, April 24 - 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.

So it's not under review then?

Rob

inspector_monkfish

Snooze wrote: »

So it's not under review then?

Rob

will have to get back to you
i understand that the review of it being not under review, is infact now under review, but thats not been confirmed yet...;)

Mr_Mumble

Rochdale_Pioneers wrote: »

So the Telegraph were talking cobblers in an attempt to talk down the economy for political reasons?

No, why do you get that impression? If you don't like the newly monikered Labourgraph then why not check out Bloomberg:

The pound fell against the dollar after Moody’s Investors Service said the U.K.’s top sovereign credit rating may be at risk as the government’s finances worsen.

http://www.bloomberg.com/apps/news?pid=20601102&sid=aUwsYtG2Tut8&refer=uk

Moody's clarifying that they haven't put the UK under formal review is quite different to what the Telegraph are reporting. If you believe the Telegraph have fabricated the quotation from the Moody's employee you should inform the press complaints authority.

Generali

To clarify, this is what Moody's has to say about the UK:

[FONT=verdana,arial,helvetica]Global Credit Research[/FONT] [FONT=verdana,arial,helvetica]Announcement[/FONT] [FONT=verdana,arial,helvetica]21 APR 2009[/FONT] [FONT=verdana, helvetica, arial]Announcement: United Kingdom [/FONT]


[FONT=verdana,arial,helvetica]Moody's: Ratings Impact of Unconventional Gov't Policies to Address Crisis is Neutral at Best[/FONT]
[FONT=verdana,arial,helvetica]

London, 21 April 2009 -- The ratings impact of the unconventional fiscal and monetary policies that some governments have adopted to address the global credit crisis is at best neutral for countries that benefit from high levels of public trust and solidarity. However, a potential erosion of this public support would limit governments' ability to stimulate their economies, says Moody's Investors Service in a new Special Comment entitled "How Safe are Safe Havens? The Ratings Impact of Aaa Countries' Unconventional Policy Responses to the Crisis".

Over the past couple of months, governments and central banks have put forward a range of unconventional policy responses to an increasingly challenging environment. These responses have included "quantitative easing" by central banks, involving the indirect monetary financing of ever-increasing fiscal deficits and some monetization of public debt.

Moody's new Special Comment addresses the legitimate concerns among investors as to whether this unusual "policy activism" is increasing the likelihood and precocity of a durable economic rebound -- on which several sovereign Aaa ratings are predicated -- or whether, conversely, policymakers are in fact taking imprudent risks with public finances, thereby weakening sovereign creditworthiness. "In effect, the economic policies of many advanced countries are now in 'unknown territory' ," explains Pierre Cailleteau, Team Managing Director of Moody's Sovereign Risk Group.

"In Moody's view, the answer to these questions depends -- rather disconcertingly -- on two potentially unstable notions: continued public trust in government institutions, including the currency, and sustained inter-generational solidarity mechanisms," says Pierre Cailleteau. Governments of highly advanced economies, where this public trust is strong enough, face only very remote limits to their ability to stimulate the economy through fiscal and monetary policies. "Unconventional policies will typically lead to very conventional outcomes -- namely, more taxes and/or greater inflation," adds Mr. Cailleteau.

In general, as has been illustrated during the post-WWII period, governments can raise, roll over and eventually pay off their debt almost without limit. "However, an erosion in the trust of the public and financial markets in institutions would limit these options, thereby exposing governments to roll-over risk," cautions Arnaud Marès, Senior Vice President in Moody's Sovereign Risk Group and co-author of the report.

In essence, Moody's believes that Aaa governments' unconventional policies are defensive responses that are -- at best -- ratings-neutral if they succeed in kick-starting economic activity. However, if they lead to massive increases in public net debt and a permanent deterioration of debt affordability without tangible growth effects, Moody's cautions that they will be ratings-negative. In extremis, since confidence is not a linear process, these policies could potentially increase 'tail risk', and therefore also the (currently small) risk of sharp rating migration.
[/FONT]

My emphasis.

'Sharp rating migration' means 'rapidly falling credit rating' in English. 'Tail risk' translates as 'seemingly unlikely event occuring'.

I should translate the whole thing really.

purch

I should translate the whole thing really.

No No No....don't do that !!!! :eek:

It's much more fun when people totally misunderstand and misquote, and then have a huge argument !!!!

baby_boomer

When is someone going to downgrade Moody's and S&P's credibility ratings? :rotfl:

They gave all the US crappy packaged loans AAA ratings so that our stupid bankers bought them without checking.

Graham_Devon

Would I be wrong in thinking that this does actually hold some substance of being a bad thing.

Places like Dubai who invest in the UK could start worrying, and offering less for their money?

Or am I totally confused

I'm just thinking theres more to the world, than Europe. Europe may all be in the same boat, doesn't mean everywhere else, who invest in us, is.

tomterm8

Mostly, Moody's & S&P only downgrade big economies after the market has already moved... um, significantly to their disadvantage. So, yes, a S&P downgrade is a bad thing but only because it would indicate the market is already on a bond strike.

The credit ratings agencies can't downgrade the UK because of QE, unless it downgrades the US and Japan, which they can't afford to do. Their credibility is damaged, and if they screw Britain, they might find they don't exist for long.