UK is downgraded

Standard and Poors have just revised their outlook rating of the UK. The UK is now had its outlook revised from stable to negative:

"-- The 'AAA' long-term and 'A-1+' short-term sovereign credit ratings were
affirmed.
-- The outlook revision is based on our view that, even factoring in further
fiscal tightening, the U.K.'s net general government debt burden may approach
100% of GDP and remain near that level in the medium term.

The only aspect that I take issue with is the 100% of GDP figure; if you include all of the off balance sheet elements it is much much higher than that.

The UK's "rating" has not been lowered but Standard and Poors point out that:

""The rating could be lowered if we conclude that, following the election, the next government's fiscal consolidation plans are unlikely to put the U.K. debt burden on a secure downward trajectory over the medium term," Mr. Beers
said. "Conversely, the outlook could be revised back to stable if comprehensive measures are implemented to place the public finances on a sustainable footing, or if fiscal outturns are more benign than we currently anticipate.""

Sterling looks remarkably stable after the expected initial shock, but will that last once the dealers have had a chance to really think about the real level of debt?


And here is Gordon's explanation of UK Debt levels from last year, looks well doesn't he?


Thanks to Guido Fawkes for reminding me of that video.



An odd blogging experience this one, I spotted the S&P outllok change whilst working and blogged it before seeing that I was not by any means the first... Oh well.