‘It’s now clear that Britain’s economic reputation is on the line at the next general election, another reason for bringing the date forward and having that election now … For the first time since these ratings began in 1978, the outlook for British debt has been downgraded from stable to negative.’
So said George Osborne when S&P placed Britain’s AAA credit rating on a negative outlook in May 2009, when Labour were in power. But guess what? Another credit-rating agency — Moody’s — has just done the same to our rating this evening. Given how much Osborne made of Britain being a ‘safe haven’, it’s rather a tricky one for him. There is now, officially, a one-in-three chance that our credit rating might be downgraded in the next eighteen months.
Why the negative outlook? In their press release, Moody’s mainly puts it down to uncertain growth and the effect that will have on fiscal consolidation.
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