UK to lose its AAA Credit Rating?

MrRee_2

Just seen on the CH4 News that this is now at risk.

The UK is the most in debt of all the AAA Rated coutries ..... if we lose this, and then money costs more - well, all bets are off!!

We would be utterly sunk alongside Greece ....... it's a little worrying, even in the bouyant South.

Graham_Devon

It's being discussed on the BBC also. It's due to the defecit reduction plan being kicked into the grass.

If the debt increases, it could actually create a situation where we are forced to pay more interest. We haven't got much room to play, and an increase of 1% in interest could see the defecit widen further.

Depends very much on the state of the economy in 2012. But it's a very clear reaction to the spending.

MrRee_2

No-one wins if we lose that rating ...... the bulls can forget the recent rapid rise in house prices (South) and the bears with money can say bye-bye to their savings ...... those wanting to borrow won't be able to.

Everything stops ....... completely.

Graham_Devon

Well not quite, but it does make Ed Balls look like a bilithering fool with his "cut taxes and spend more" reaction to the autumn statement today.

Mr_Mumble

Gosh, if debt interest payments increase the toffs in charge may have to do something unconscionable such as cut payments to the IMF, EU or foreign aid budget!

Tongue-out-of-cheek: if there is a gilt strike it would mean a bigger drop in living standards in the UK than any other country in Europe. Britain's primary deficit is worse than Greece's!

Graham_Devon

What I'm rather disallusioned by, is why every single forecast the government (outgoing and incoming) produces, is so wide off the mark and so hopelessly optimistic every single time?

It's not like it's just out a slight bit either. Debt now is projected to be 25% higher for one year than what was predicted just months back. Growth forecasts are downgraded every single time we review them.

Inflation for the past 3 years has been approximately 150% OVER what was forecast.

They seem to make plans based on these forecasts, only making the problems worse each time. If they keep doing this, of course we will get downgraded.

brit1234

Whilst we keep interest rates so low we are just delaying the problem and recovery.

They have just indicated more public sector job cuts.

House prices are going to clearly fall, maybe more than we thought.

Eventually we lose our credit rating. Even with triple A ratings there is ranking for countries with different interest rates.

DervProf

I don't know if I'm more shocked by this news, or the fact that MrRee has posted something "less than bullish".

Indeed, I agree that Ed Balls is a fool. He seems to want us to believe that his debt reduction plan will cause no or little pain, and that it will work. The fact is that New Labour's "good times" were helped by their credit card. The statement has arrived, and he wants the current government to make the minimum payment (or transfer it to another card).

Talking of credit cards, I must pay this month's (hefty) bill. I don't want to, but I know that if I don't it will cost me more in the long run. Why didn't those that run the world's finances not adopt the same attitude ?

michaels

With sovereigns, ratings tend to move later than rates, UK rates are already risk adjusted so the rating only matters fro funds which are limited to only holding certain categories of debt.

Pop quiz - does being outside the Euro mean that we can not look to get protection from the European Central bank and any european bail out funds?!

lvader

MrRee wrote: »

The UK is the most in debt of all the AAA Rated coutries ..... if we lose this, and then money costs more - well, all bets are off!!

.

Not true, the UK has one of the lowest debts of the AAA countries. It has the largest deficit.

Rochdale_Pioneers

The credit agencies and the markets recognise simple basics. That you cant repay debts without growth. And you can't generate growth without someone spending. And with government now planning to spend less, and a promise of yet more job losses, longer working and worse pensions, todays announcement surely is only going to slow economic output even further.

Hence the AAA warning.