Moody’s Downgrade: Britain loses AAA debt rating

The rating agency cut Britain’s grade by one notch to Aa1.


Afp February 24, 2013
The Bank of England's rating also fell from AAA to Aa1. PHOTO: AFP/FILE

WASHINGTON:


Moody’s stripped Britain of its triple-A debt rating Friday, saying government debt was still mounting and that growth was too weak to reverse the trend before 2016.


In an expected rebuff to the Cameron government’s hopes that sharp spending cuts will both reduce its deficit and give growth a boost, the rating agency cut Britain’s grade by one notch to Aa1. In parallel, it lowered the rating of the country’s central bank, the Bank of England, which also fell from AAA to Aa1.

The move sent the pound tumbling and put the architect of British austerity, Finance Minister George Osborne, on the defensive. “Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it,” he said after the Moody’s announcement.

The main driver for the downgrade, Moody’s said, “is the increasing clarity that, despite considerable structural economic strengths, the UK’s economic growth will remain sluggish over the next few years.” 

Published in The Express Tribune, February 24th, 2013.

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