Downgrade for UK credit rating

The man in charge in Britain’s economy said Friday that he won’t change direction, despite a rating agency’s decision to downgrade the nation’s credit rating

Chancellor of the Exchequer George Osborne spurned calls from the Labour Party opposition for more stimulus to assist a flat-lining United Kingdom economy.

Mr. Osborne said the action by Moody’s Investors Service “redoubled his commitment” to the government’s policy of cutting spending in an effort to reduce deficits.

Labour Party spokesman Ed Balls said Saturday that the government should increase borrowing to give immediate stimulus to the economy.

Announcing the downgrade one notch from the top Aaa to Aa1 on Friday, Moody’s said sluggish growth and rising debt were weakening the British economy’s medium-term outlook.

 

0
0

5 COMMENTS

  1. You would have to be a Keynesian not to realize that worldwide sovereign debt is too large to ever repay. Western governments will collapse, sooner not later. Plan accordingly.

    0

    0
  2. Is this the country that wants to advise Cayman on financial matters?

    I am not suggesting that Cayman doesn’t need help, but we should be looking for help from countries that have demonstrated that they are able to manage their own finances.

    0

    0
  3. How cares what happens with UK. My only bet that with parties Cayman has now, in absence of any control from UK, external debt would be a few magnitudes bigger with the same set of problems we have now. Yes, it is harsh at times, yes, it can be difficult to swallow, but I think Cayman people should say thanks.

    0

    0
  4. The good news is the Cayman economy is not tied to the Pound Sterling. The bad news is the Cayman economy is tied at the hip to the U.S. economy.

    The current global financial system of fiat money is by nature a pyramid scheme of ever increasing sovereign debt. Governments are bumping up against their ability to service the debt. The U.S. can always print money to service its debt. Cayman can’t. Cayman’s debt to GDP is 25%.

    The U.S. Federal Reserve Bank is surpressing interest rates by purchasing all the bonds at the long end of the yield curve. However, this can’t go on indefinitely.

    What is Cayman’s plan when interest rates rise to more normal levels?

    0

    0

Comments are closed.