Moody’s changes outlook on UK government debt to negative - stays at Aa2
“UK’s Institutional capacity and commitment to fiscal discipline has weakened”... “Brexit the catalyst for this erosion...significant weakening of indicators for Government effectiveness and Rule of Law”
“UK’s Institutional capacity and commitment to fiscal discipline has weakened”... “Brexit the catalyst for this erosion...significant weakening of indicators for Government effectiveness and Rule of Law”
Second factor cited - weakening fiscal policy environment... no longer decline in debt burden, rising pressure for spending, demographic factors, fall in business investment after referendum. No deal “strongly negative” for rating.. but “indications” on deal are also negative
So this is a credit rating - these agencies did not over themselves in glory during the crisis on mortgage bonds. But record on sovereigns is more solid.
Interesting thing here is that it is driven by a perceived “material deterioration” in UK Governance...
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Interesting thing here is that it is driven by a perceived “material deterioration” in UK Governance...
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History here is interesting, Moody’s actually downgraded UK to Aa2 hours after Theresa May’s Brexit red lines speech in sep 2019...
AAA was held for nearly a century till lost in 2013. Was actually awarded by the pen of John Moody himself in 1918.
AAA was held for nearly a century till lost in 2013. Was actually awarded by the pen of John Moody himself in 1918.
at a time when bond markets are paying to lend money to nations over decades, and UK still enjoys a long average maturity on its debt, this is a market warning signal, but it is an interesting one... natural consequence of UK political Economy right now
moodys.com/research/Moody…
moodys.com/research/Moody…
Typo. September 2017, of course.
... on the 1918 award of the AAA to Uk by Moodys...
