We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO
inspector_monkfish
Posts: 9,276 Forumite
16:32 05Jan10 UK AT 80% RISK OF RATING DOWNGRADE ON CURRENT DEBT PLAN:PIMCO
16:32 05Jan10 UK GILT YIELDS MAY RISE 100BPS ON END OF BOE BOND BUYS: PIMCO
16:32 05Jan10 UK GOVT DOESN'T HAVE CREDIBLE DEBT REDUCTION PLAN: PIMCO
16:32 05Jan10 CLOSE UK ELECTION COULD UP PRESSURE ON GILT YIELDS: PIMCO
16:32 05Jan10 UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO
UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO
LONDON--The U.K. government faces an 80% chance of a credit
rating downgrade if its deficit reduction plans remain as they are, Scott Mather, Pacific Investment Management Co.'s head of global portfolio management told Dow Jones Newswires Tuesday.
Mather also said yields on U.K. government bonds - known as gilts - could
rise by as much as 100 basis points when the Bank of England's bond-buying
program ends,
Asked if the U.K. faced a serious risk of suffering a downgrade to its credit
rating, Mather said "I think so."
"It's just a question of when on the current trajectory, not if," Mather
said. "Based on what we know today about the debt trajectory and about the
inability to adjust that, I think it's greater than a 50% likelihood for sure.
Call it more like 80%."
Mather said the government's debt reduction plan "is lacking in conviction
and it is lacking in details."
He also said the end of the Bank of England's bond-buying program will have a significant impact on U.K. gilt markets and borrowing costs.
"Common sense would tell you that if you had a buyer in the market place
which was taking the majority of the sector repeatedly... and then they
disappeared, ...you would expect a reprising, and it could be quite significant,"
he said in a telephone interview.
"The estimates vary. They're really all over the map, but it could be 50
basis points, it could be 100 basis points, in that range."
PIMCO runs the Total Return fund--the world's biggest bond fund.
16:32 05Jan10 UK GILT YIELDS MAY RISE 100BPS ON END OF BOE BOND BUYS: PIMCO
16:32 05Jan10 UK GOVT DOESN'T HAVE CREDIBLE DEBT REDUCTION PLAN: PIMCO
16:32 05Jan10 CLOSE UK ELECTION COULD UP PRESSURE ON GILT YIELDS: PIMCO
16:32 05Jan10 UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO
UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO
LONDON--The U.K. government faces an 80% chance of a credit
rating downgrade if its deficit reduction plans remain as they are, Scott Mather, Pacific Investment Management Co.'s head of global portfolio management told Dow Jones Newswires Tuesday.
Mather also said yields on U.K. government bonds - known as gilts - could
rise by as much as 100 basis points when the Bank of England's bond-buying
program ends,
Asked if the U.K. faced a serious risk of suffering a downgrade to its credit
rating, Mather said "I think so."
"It's just a question of when on the current trajectory, not if," Mather
said. "Based on what we know today about the debt trajectory and about the
inability to adjust that, I think it's greater than a 50% likelihood for sure.
Call it more like 80%."
Mather said the government's debt reduction plan "is lacking in conviction
and it is lacking in details."
He also said the end of the Bank of England's bond-buying program will have a significant impact on U.K. gilt markets and borrowing costs.
"Common sense would tell you that if you had a buyer in the market place
which was taking the majority of the sector repeatedly... and then they
disappeared, ...you would expect a reprising, and it could be quite significant,"
he said in a telephone interview.
"The estimates vary. They're really all over the map, but it could be 50
basis points, it could be 100 basis points, in that range."
PIMCO runs the Total Return fund--the world's biggest bond fund.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
0
Comments
-
Well as the bloke says its only a matter of time,:jYou can have everything you wont in lfe, If you only help enough other people to get what they wont.:j0
-
inspector_monkfish wrote: »16:32 05Jan10 UK AT 80% RISK OF RATING DOWNGRADE ON CURRENT DEBT PLAN:PIMCO
....
PIMCO runs the Total Return fund--the world's biggest bond fund.
Does anyone know if PIMCO has a conflict of interest, it wouldn't surprise me if they are betting on turbulance in the gilt market.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
if its deficit reduction plans remain as they are
Which we all know they will not under a Conservative government.
Therefore it's just another IF as we so often hear from the bears.
IF this, IF that, IF the other.
Yes, I know, IF a meteor strikes tomorrow wiping out half of humanity, house prices will fall !!!!!!.
Chances of it happening are still extremely remote though.:rolleyes:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Which we all know they will not under a Conservative government.
Therefore it's just another IF as we so often hear from the bears.
IF this, IF that, IF the other.
Yes, I know, IF a meteor strikes tomorrow wiping out half of humanity, house prices will fall !!!!!!.
Chances of it happening are still extremely remote though.:rolleyes:
What a numptie you are.
Everything in the future is an 'IF', unless you have invented some kind of time machine.0 -
What a numptie you are.
Everything in the future is an 'IF', unless you have invented some kind of time machine.
Seriously, what is the point of saying that?
We know the conservatives will get in. We know they'll cut the debt further than the current plans.
Therefore the entire premise of the OP is invalid.
There's more chance of you becoming a raging housing bull than there is of the UK losing it's AAA rating.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Seriously, what is the point of saying that?
We know the conservatives will get in. We know they'll cut the debt further than the current plans.
Therefore the entire premise of the OP is invalid.
There's more chance of you becoming a raging housing bull than there is of the UK losing it's AAA rating.
My point is that everything in the future is an unknown.
However in terms of the AAA rating, who knows. Will the FTSE be 8000 points next year, who knows. Will house prices go up or down by 40% next year, who knows.
All I do know is that we have a huge debt and printed money in the system. These factors by there very nature have a baring on any rating, it would be foolish to assume otherwise. Unless governments had some kind of power against the ratings agencies, which in itself would reprice risk.0 -
So hamish, what difference will a tory government make that Labour wont? I want you to spell it out exactly....
0 -
This all assumes the market happily sits and waits for the election of course.HAMISH_MCTAVISH wrote: »Which we all know they will not under a Conservative government.
Therefore it's just another IF as we so often hear from the bears.
IF this, IF that, IF the other.
That's another IF.
Doesn't the QE program end later this month? If so, we have a chance to watch the market response to that.
We may as well have this conversation at Easter time really. We will know a lot more by then.
In some ways, the election is coming at a pretty bad time.0 -
Unfortunately there is not a guarantee that Labour will lose.
The markets presumably have to operate on the basis of status quo, until such time that signs of movement occur, whether that is Darling having an emergency budget or the election taking place and the winners being known, rather than guessed or hoped for.0 -
Cannon_Fodder wrote: »Unfortunately there is not a guarantee that Labour will lose.
The markets presumably have to operate on the basis of status quo, until such time that signs of movement occur, whether that is Darling having an emergency budget or the election taking place and the winners being known, rather than guessed or hoped for.
I am kinda silently hoping that Labour get in for one last term... to see how badly they cope with all the excrement they have left the Tories.
I reckon they would last a month before a general gilts strike and the populous riot with the effect of no money in the public coffers...0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.9K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards