It’s not very festive, but we have to wander into acronym territory again.
Moody’s last night warned that the UK’s AAA credit rating is at risk if economic
growth continues to slow. At the same time, minutes from the Bank of England’s meeting early this
month, released today, show that its committee members were unanimous in backing Quantitative Easing, and several of them feel more QE can be justified. But how potent can QE be if Britain loses
its AAA?
It’s clear that George Osborne, who’s claimed that the UK has retained its top debt rating so far due to his deficit-cutting and austerity measures, won’t have a happy new year if Britain loses its AAA. But it’s going to be a big headache for Mervyn King too.
The BOE’s monetary stimulus programme, as we pointed
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