Osborne Loses It - Our Triple A Rating And Its Future

DecentLivingWage

Am I correct in thinking that our Triple A rating is a reflection of 'what we're good for' in terms of paying back our UK overdraft? So financial markets and world business loses confidence in our ability to pay up on UK debt? If so, didn't Osborne just default yesterday... on the actual date I mean! Confusing! Someone elaborate - there is a difference between 'The Deficit' and 'UK Debt.' One is our overdraft.... but how this relates to the AAA rating we in UK used to be renowned for. Labour left Growth at 4% and the world had confidence in our ability to pay it back because Labour invested in projects and future growth but the conservatives have killed it so no one trusts us?

PS Frightened Broke Voters Dont Spend!

Generali

The deficit is the difference between the amount the UK Governments (including local and regional Government) spend and take in tax, charges etc.

'UK debt' doesn't have a definition but is probably a reference to the National Debt which is the total cash debt owed by the Government. Unlike most bodies (e.g. companies, unions and charities) the Government only has to declare a cash debt, it doesn't have to include the cost of promises to pay money out in future..

The AAA rating is a reflection of the opinion of a credit ratings agency of how likely the UK Government is to repay her debts. AAA is the highest rating.

UK GDP grew about 1.4% in the year leading up to the last General Election. I'm not sure where 4% growth came from. The last time there was growth in the UK of 4% was in 2003. It is highly unusual for the UK's GDP to grow at that rate.

Radiantsoul

Imagine you have a bath. The debt is the amount of water in it. The amount of water pouring in from the tap is the deficit.

There was no default.

Labour did not leave with growth at 4% or the confidence of the world.

Wookster

DecentLivingWage wrote: »

Labour left Growth at 4%

It was a dead cat bounce. In-case you hadn't noticed, the world economy is now slowing again. The UK is not along in being in recession.

DecentLivingWage wrote: »

and the world had confidence in our ability to pay it back because Labour invested in projects and future growth but the conservatives have killed it so no one trusts us?

The spread of Gilt yields against German bunds was rising until May 2010 at which point it started falling. This is the market's verdict on the different approaches of the two governments.

Alternatively Fitch's postulates that: the UK government’s failure to hit his debt targets

weakens the credibility of the UK’s fiscal framework which supports the rating

i.e. not applying additional cuts by allowing an extra year to eliminate the deficit is weakening the UK's fiscal credibility.

System

The uncomfortable fact the rating agencies will soon have to face is that they too have a credibility rating.

They have already been downgraded from AAA - "we believe anything you say"
to BBB - "we are beginning to suspect that you may be part of the problem".
If they throw their weight about too much they have only one way to go.

Junk status "Fitch's in receivership" would be an ironic ending.

GeneHunt_2

I'm sick of listening to the Tories blaming labour for where we are - they've had to 2 years to do something about the deficit and they've done sweet FA in the cutting department - in fact, things are getting worse.

GROW A SPINE AND MAKE SOME CUTS YOU BUNCH OF CLOWNS.

Fella

GeneHunt wrote: »

I'm sick of listening to the Tories blaming labour for where we are

OK but you being sick of hearing the truth doesn't make it untrue.

Labour are resoundingly responsible for leaving the economy in a horrific state.

Thus far the coalition are responsible for doing very little to fix it. But that doesn't make them responsible for creating it & even a superb Govt would probably not have achieved that much in two years. The depressing thing is this Govt is not superb & actually not showing much sign of being even half-decent so it's highly likely things won't improve much in the next 3 years either.

Making the prospect of the next election a truly sobering one.

StevieJ

Generali wrote: »

UK GDP grew about 1.4% in the year leading up to the last General Election. I'm not sure where 4% growth came from. The last time there was growth in the UK of 4% was in 2003. It is highly unusual for the UK's GDP to grow at that rate.

I thought that was in the last Qtr, 1% x 4 = 4%

Britain’s economy grew 1 per cent between the second and third quarters, as originally estimated,

http://www.ft.com/cms/s/0/94d73b66-3876-11e2-bd7d-00144feabdc0.html#axzz2EHLwCjfp

GeneHunt_2

Fella wrote: »

OK but you being sick of hearing the truth doesn't make it untrue.

Labour are resoundingly responsible for leaving the economy in a horrific state.

Thus far the coalition are responsible for doing very little to fix it. But that doesn't make them responsible for creating it & even a superb Govt would probably not have achieved that much in two years. The depressing thing is this Govt is not superb & actually not showing much sign of being even half-decent so it's highly likely things won't improve much in the next 3 years either.

Making the prospect of the next election a truly sobering one.

oh please the Tories have had 2 and a half years to do something and all they are doing is piling up even more debt....they need to grow some balls or get voted out... I'm honestly not sure that the Labour party could have messed up this bad...

Fella

You appear to be angrily agreeing with me.

GeorgeHowell

GeneHunt wrote: »

. I'm honestly not sure that the Labour party could have messed up this bad...

They already did.