FT Suggests That UK Gilts Have Lost Triple A Rating
Posted by Simon Emmett on March 1, 2010, 10:14
There is worrying news in the FT this morning regarding the UK’s economy. The report in the Financial Times states:
“British government debt is already trading at prices that suggest it has lost its prized top credit rating, heightening concerns that investors already view gilts as less than triple A-rated assets and demand greater rewards for holding them”
This is a concerning as is shows that the markets are not convinced with the Governments plans for tackling the defecit. At present this is just a warning, as it is not the economy as a whole that has lost the treasured credit rating. But that fact that it is costing us more to service the government’s borrowing, is clear that the markets are worried as to whether we will pay it back.
It is clear that the government do not want to take action, until after the election of course to avoid bad headlines, and that dithering will harm the economy further.
The credit agencies themselves have admitted that they too are waiting to make their decision on our formal credit rating before an election. But let us be quite sure that is because they will be weighing up each parties manifesto, and if the party that doesn’t want to make decisions, act swiftly, or have a credible plan (which is the current government policy), then they will act and act hard.
