'Austerity' harms struggling economies.
Congress, are you WATCHING...........
U.K. Loses Top Aaa Rating From Moody’s as Growth Weakens
By Fergal O’Brien - Feb 22, 2013 5:10 PM ET
Britain lost its top credit rating by Moody’s Investors Service, which cited the continuing weakness in the nation’s growth outlook and the challenges that presents to the government’s fiscal consolidation program.
The rating on the U.K. was lowered to Aa1 and the outlook on the nation’s debt changed to stable, Moody’s said in a statement today. With the U.K.’s high and rising debt burden, a deterioration in the government’s balance sheet is unlikely to be reversed before 2016, Moody’s said in the statement.
The cut will increase political pressure on Chancellor of the Exchequer George Osborne, with the opposition Labour Party calling on him to scale back his fiscal squeeze as the economic recovery struggles to gain traction.
Still, investors often ignore such actions, evidenced by the drop in French 10-year bond yields following a downgrade last year and a rally in Treasuries after the U.S. lost its top rating at Standard & Poor’s in 2011.
“They have drawn a line in the sand that if we don’t put forth a formidable plan we don’t deserve a triple-A rating,” said Joseph Balestrino, senior fixed-income strategist for Pittsburgh-based Federated Investors Inc., which oversees $51.4 billion of assets.
more:
http://www.bloomberg.com/news/2013-02-22/u-k-loses-top-aaa-rating-from-moody-s-as-growth-outlook-weakens.html
DO SOMETHING!
| 