UK could lose coveted AAA rating, warns Fitch

The Telegraph ^ | 8:55PM GMT 14 Mar 2012 | By Jonathan Sibun, Louise Armitstead

[ChildOfThe60s]

In a major setback for George Osborne ahead of next week’s Budget, Fitch said the “risks and uncertainty” surrounding the Coalition’s debt reduction plans were “material”.

Fitch said it regarded the Government’s fiscal plans as “credible”, but said that its decision to take a negative outlook reflected “the very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery”.

The credit rating agency put a slightly greater than one in two chance on a downgrade for the UK over the next two years.

[ChildOfThe60s]

"100-year gilts"??

This is insane.

And what is the UK doing with a AAA rating now? It's bankrupt.

[AnotherUnixGeek]

UK could lose coveted AAA rating, warns Fitch

Sterling credit ratings are only worth coveting if you're planning to borrow money. Nations with crushing debt burdens, like people with crushing debt burdens, should be worried about other things.

[Greysard]

Nations with crushing debt burdens, like people with crushing debt burdens, should be worried about other things.

Should be. But in practice it's largely people and countries who need money that borrow money.

[Caulkhead]

“And what is the UK doing with a AAA rating now? It’s bankrupt.”

The difference between the US and UK is that both have huge debts but only the UK has a credible plan to reduce it, hence our credit rating.

[ChildOfThe60s]

I confess I know nothing of the plans in place for the UK to deal with the debt. So I can’t comment on their credibility.

But the notion of 100 year Gilts sounds pretty, well, nuts.

[Caulkhead]

“But the notion of 100 year Gilts sounds pretty, well, nuts.”

I totally agree with you, but the markets will decide. :)