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   The UK’s credit rating has been downgraded from AAA to AA1 by credit agency Moody’s.
 
The announcement follows speculation that the much coveted triple A rating was under pressure following disappointing economic news and forecasts of continued sluggishness for the UK economy.

Moody’s is the first of the major agencies to downgrade the UK, but both Standard & Poor's and Fitch Ratings have negative outlooks.

The news will pile pressure on UK Chancellor George Osborne who has faced repeated calls to decelerate the coalition government’s austerity measures.

Speaking to Reuters, Moody's sovereign credit analyst Sarah Carlson said:

"We see growth slowly building back up to that trend ... but if you take a combination of the growth and fiscal dynamics, the result is that the debt burden of gross general debt to GDP peaks in 2016, which is substantially later than was expected a few years ago,"

The announcement is acutely embarrassing for Mr Osborne who has insisted he be judged on his ‘protection’ of the coveted rating.  The Conservative manifesto highlighted the importance of the triple A and pledged to “safeguard” it.

A defiant Mr Osborne has vowed the downgrade will “redouble our resolve”, however his prestige and credibility will now be questioned by his political opponents.

Labour Shadow Chancellor Ed Balls described the downgrade as a “Humiliating blow to the Prime Minister and chancellor” but tempered his criticism by saying that it would be a “big mistake to get carried away”

The news is also a disaster for the pro-Union campaign with leading figures repeatedly insisting that a Yes vote would jeopardise the AAA credit rating of an independent Scotland, which could only be protected by voting against independence.

Last October, the Scottish Lib Dem MP Danny Alexander claimed the cost of borrowing in an independent Scotland would shoot up soon after it broke away from the UK.

The chief secretary to the Treasury said Edinburgh would have the same debt problems as the rest of Britain but would struggle to raise money in international bond markets on the same terms.

“At the moment we are able to borrow at record low levels,” Mr Alexander told a Lords economic committee. “There is a very good question about what view the credit rating agencies take on a newly established country without any established fiscal track record and what rates would be paid on its new debt.”
 
According to Mr Alexander, having to pay higher interest rates would have a significant impact on the fiscal sustainability of the new country, forcing it to make some very difficult choices.  Also claimed as a weakness in achieving a Triple-A rating was Scotland's relatively small population size.

However, almost two-thirds of the countries that currently hold triple-A status have populations of less than ten million, including Finland, Sweden, Denmark, and Norway.

The Inverness MP had previously claimed that the loss of the triple A would cost Scots £1 billion, saying in June: “Credit rating agencies have said countries with new institutions take time to establish credibility.

“We’ve said before if interest rates went up one per cent, it would cost families across the UK an extra £10billion in mortgage costs.

“It is likely the same one per cent would cost families in Scotland up to an extra £1billion.”

Scotland currently has stronger public finances than the rest of the UK, with the most recent GERS figures showing that Scotland contributes 9.6% of public revenues but receives 9.3% of public spending.

The SNP Government has argued that a low rating would be achievable given that John Swinney has balanced Scotland’s budget in every single year since 2007 while the oil & gas sector boosted the UK’s balance of trade by £40 billion. On an internationally comparable basis Scotland’s share of UK debt in 2010 would have been 64% of GDP, compared to the UK’s 76%, the EU’s 80% and the G7’s 114%.

Commenting, SNP Westminster Treasury spokesperson Stewart Hosie MP said:

“The UK government failed to learn the lessons of economic history, and has taken exactly the wrong approach to the recession.

“And now the ill-judged attacks that anti-independence politicians have made about Scotland have come back to haunt them - this is negative news for the UK economy, and also a hammer blow to the credibility of the No campaign.

"First, we heard from the UK Government how important it was to cut the deficit and pay off debt to avoid a downgrade. Now - with austerity in the UK projected to last at least six more years - they said that the AAA rating was unimportant.

“The No campaign can’t have it both ways - the scaremongering simply doesn’t stack up and has completely unravelled tonight.

“The record of our neighbours shows that small, well managed independent countries can have every expectation of enjoying the highest credit rating and more importantly favourable bond yields. Almost two-thirds of the countries that now hold triple-A status have populations of less than ten million - including Finland, Sweden, Denmark, and Norway.

“Scotland is in a stronger financial position than the rest of the UK, and that is a positive starting point from which to grow and develop the economy of an independent Scotland.”

Comments  

 
# Big Eye 2013-02-22 23:54
I remember being told that this is why we are better together.

Not any more, if ever, what is it they say?

Events, dear boy, events!
 
 
# call me dave 2013-02-22 23:59
I'm not celebrating by any means and I agree with Ed Balls that it is humiliating.

But will he [George Osborne] change tack on the austerity agenda and start putting some cash into building houses for example. It is reckoned that it would create about 400,000 jobs across the economy and people need them.

It's an ill wind that blows nobody any good and it will knock another unionist myth that only the UK can sustain a AAA credit rating. The flipper will be putting a line through that reason for voting keeping the status quo.
Open goal for the YES campaign but it needs to be played with care.
@;]
 
 
# ButeHouse 2013-02-23 01:15
My God. The unionists made such an almighty fuss about an independent Scotland not getting a triple A rating and how much of a disaster that be would be when lo and behold, the mighty great britain which we are told daily it would be better for us to be part off goes and loses the hallowed triple A.

I wonder how many Scots unionist MPs will be sounding off about this latest disaster? Answer zero.

No doubt what would be a disaster for Scotland will be a mere hiccup for the not so great britain.

VOTE YES in 2014
 
 
# chicmac 2013-02-23 01:40
Whether this is enough to prick the bonds bubble or not, time will tell. But any further downgrade will and then all hell will break loose.

Rates can shoot up virtually over night, when they hit around 5% Britain will need to go cap in hand to the EU/IMF for a bailout.

No point in hoping that won't happen, it will. So I think it is legitimate to hope it happens before the referendum rather than after. At least then Scots will know for sure they will be far better off financially with independence.
 
 
# dadsarmy 2013-02-23 02:53
Perhaps Salmond has an ace up his sleeve - he announces he's bringing forward the Referendum to February 2014 as we can't afford another 8 months in the UK while Osborne's - I was going to say "in charge", but it should be "on a charge".

That'd make them sit up and think "YES".

AA1 isn't a disaster in itself, it could give a bit of a breathing space. What is a disaster is Osborne saying "Austerity is working".

Well, no, it isn't, you blundering fool.
 
 
# willie boy 2013-02-23 06:26
In truth Britain lost its AAA six months ago and with the economy continuing to fail as debts continue to balloon, Aa1 is now probably lost too.

Of course by every other measure be it per capita gdp, hdi, gini the UK is in a poor state. Even the petrol sales which are the lowest in 23 years are a simple reflection of how the economy is not moving.

So what is it that the big boys like Germany, Canada, Australia or Singapore, Sweden, Norway, Finland or Switzerland have aside of AAA status. High Gdp, Hdi and low gini do I hear.

Ah but they don't have Trident.
 
 
# willie boy 2013-02-23 06:35
What do top flight economies like Australia, Canada, and Singapore not have in common with Scotland.

No longer colonies to Blighty do I hear you say. Or Norway who became independent in 1910 in a friendly split with Sweden.

No but for Scotland we are too poor, too thick, too dependent. Alisdair Darling tells us so as most successful UK chancellor ever. Better Together.
 
 
# UpSpake 2013-02-23 07:11
Strip out the socialisation of Bank debt and it might just might have been possible to have avoided this embarrassment Mr. Osborne.
Clearly, like so many Chancellors before you exhibit little or no understanding about the real economy.
Must be hard really being a rich boy from a priviledged background, with little or no business experience, like your predecessors suggests to me that you simply haven't got a clue.
Wollow in your downgrade, it won't be the last.
Watch an independent Scotland start with a AA and move in rapid time to a AAA by which time you will be at B-.
 
 
# Diabloandco 2013-02-23 08:41
Not celebrating either but after the
hoo-ha and head shaking warnings what are they going to say?

OT Baby grandson arrived somewhat unexpectedly just after midnight - definitely won't be on the march but hope it is seriously well attended.
 
 
# Robabody 2013-02-23 19:14
Congrats Diabloandco - hope Grandson and daughter / daughter in law are in grand shape and I'm sure you'll welcome the little one into our great country with a dram of something!

Mr & Mrs Robabody were at the march today, I'd say about 100 to 130 people attended but what we lacked in numbers we made up for in volume. After the speeches including one from a lady journalist (with a bonny wee bairn) who reminded us that not all journalists are "free" to make comment as they would possibly like, Mrs Rob and I adjourned to nice little restaurant for lunch. I thanked the waiter for the window seat adjacent to the road works, as being from Edinburgh it so reminded me of Princes Street. I did give him a generous tip afterwards - what was it again, something about tea and having had it? Anyhow thanks to the organisers and all who attended, great start.
 
 
# From The Suburbs 2013-02-23 09:06
Why is this bad British news buried in the inside pages of our newspapers whereas independence scaremongering is given banner headlines?

The NO campaign is currently putting out leaflets says that Scots mortgage payers will pay millions more in interest rates if we lose the UKs AAA Credit Rating but Wilie Rennie refused to say on BBC GMS this morning that they would withdraw these erroneous leaflets.

So once again the NO campaign doesn't let facts get in the way of another scaremongering story.
 
 
# colin8652 2013-02-23 09:31
Would Mr Darling like to make a statement on this issue? .......... Thought not !
 
 
# farrochie 2013-02-23 09:33
"insisting that a Yes vote would jeopardise the AAA credit rating of an independent Scotland,"

Well, the story now becomes:

1. "a Yes vote would jeopardise the AA1 credit rating...."

2. Things would have been much worse if Scotland had been "separate".

We know the cut and paste narrative by now.
 
 
# Jim Johnston 2013-02-23 09:37
Oh dear, 'ow sad, nevermind.

Not to worry, IT'S a BANKERS THING and if the blame doesn't lie with the Pope for packing in, it must be the SNP's fault for causing so much uncertainty.

Strange thing is, investment seems to be pouring into Scotland at a rate of knots, in spite of Westminsters finest.

Btw the economy isn't everything, Independence is priceless. That said two thirds of the AAA rated countries being less than 10 million in population surely cant be down to fluke.
 
 
# Breeks 2013-02-23 10:08
You know what would make this article more cheerful?

If the article had started "And now, in foreign news...."
 
 
# proudscot 2013-02-23 10:37
The No Campaign claimed Scotland was stronger and better defended by being part of the UK, then Westminster cut the military and is in the process of sacking serving soldiers. Strike One!

The No cabal also asserted Scotland wouldn't benefit from the UK's AAA rating. Strike Two!!

They also assert Scotland won't be part of the EU. Now Cameron has threatened to hold an "in/out" referendum to placate his rabid right wing Tories. If this results in the UK leaving the EU, will this be Strike Three against the No lot's arrogant assertions against independence for Scotland?
 
 
# pomatiaH1 2013-02-23 11:10
No one should hold their breathe, expecting a rational or reasoned response from Osborne. It will still be the fault of someone else. Listening to his response the fault will be the people of this country for using money and the remedy will be to increase the cuts.
Cameron was talking about commemorating WW1. There is a remarkable similarity between the thinking of this UK Government and the ruling class of that time.
Then, the Government and Generals spent four years doing the same thing over and over; getting nowhere. Millions of ordinary people paid the price. Now this UK Government has spent three years doing the same thing over and over, doing worse than getting nowhere........
 
 
# km 2013-02-23 11:36
Danny Alexander said today, "...the UK government must continue its economic recovery plan. Credit rating agencies were not the be all and end all"

Well, well, well Danny boy. Enjoy your salary while it lasts.
 
 
# CharlieObrien 2013-02-23 11:40
Aye I can only agree with all of the comments,the credit rating for Westminster will drop a lot further when we take our independnece,mi ght cause our neighbours to sit up and get rid of the inverted pyramid,were a few workers support a host of parasites.
 
 
# robbo 2013-02-23 11:45
What is genuinely surprising is how on earth it took so long to drop.
 
 
# John Souter 2013-02-23 11:52
This has been on the cards for sometime and has probably been factored in by the manipulators of finance. Hence the news last night of imminent increased prices at the fuel pumps.

In the economic asylums it's considered prudent if you're deeply in debt and can't work or trade your way out of it in order to service it then de-value the debt and leave it to others to shoulder the burden of the increased service costs.

They call that inflation. And that tends to inflict less pain on those with real tangible assets - they merely increase in value - than on those who merely buy to exist.

So for all his empty rhetoric and lobotomised capabilities I suspect Mr Osborne and his cabinet colleagues are quite happy to see their triple A rating squashed.

If for no other reason it adds another layer of camouflage to hide their incompetence.

Vote No - and watch your boots filling with another dose of apathy cement.
 
 
# Leader of the Pack 2013-02-23 12:09
Each revelation of this magnitude should be delivering killer blows to the No Campaign from which there could be no recovery yet it barely makes a dent because of their supreme control of the MSM! They dont even feel the need to retract on exposed previous statements of misinformation.
If the Yes campaign doesnt find a way to tap into a mainstream distribution of these exposures and highlight the damage they are doing to the campaign of lies then it doesnt matter if they are exposed or not! This campaign will be won or lost within the media! We will get one chance at this in our lifetime so somebody better find a way to counter the destructive force of the MSM in the UK or we will never see Independence.
 
 
# gopher3 2013-02-23 12:41
I believe Osborne has said that the loss of AAA rating is not important, and the austerity cuts will increase in the near future.
The man is quite MAD.

The only solution is a YES vote in 2014.
 
 
# RTP 2013-02-23 12:43
Many months ago Osborne and Alexander was telling us it was very important that UK keep triple AAA rating now its not all that important,poor Scotland having to listen to this shower.We had Darling and Alexander in Inverness the other day speaking to 60 people at a breakfast event,a private meeting Alexander refused to reveal who had attended,was this to raise money for the BT crowd.???
 
 
# Trafalgar 2013-02-23 12:48
In 2011, the USA lost it's AAA rating. Experts believed it was the beginning of end, that stocks and the economy would collapse. None of that happened, instead, borrowing costs fell to an all time low and stocks rallied to a near all time high.After Japan and Canada lost their AAA ratings, their stock markets saw double digit gains. On average, when a country loses their AAA ratings, their borrowing costs fall too.
 
 
# scotsmanc1 2013-02-23 13:18
Good piece in today's Bella Caledonia on the reduction in the Government's Credit rating. No grounds for Labour to gloat.

bellacaledonia.org.uk/.../
 
 
# BillCo 2013-02-23 13:22
We ain't seen nothing yet.

The next train hurtling down the track towards another financial crash is the UK bond bubble express.

Bond prices are vastly over-inflated. A substantial adjustment downwards is inevitable and is not far off happening.

The effect on pension funds, especially of those who are about to retire since much of their funds will have been transferred over to 'gilt-edge securites'like bonds, will be potentially catastrophic.

The value of the pound will plummet and interest rates and inflation will go through the roof.

The SNP preferred currency post independence i.e. the Pound Sterling could well be a busted flush by the end of this year never mind October 2014.

I hope AS & JS have a plan B up their sleeve.
 
 
# Alba4Eva 2013-02-23 22:40
Quoting BillCo:
The SNP preferred currency post independence i.e. the Pound Sterling could well be a busted flush by the end of this year never mind October 2014.

I hope AS & JS have a plan B up their sleeve.


Correct Bilco. Be smart, store wealth in physical Gold & Silver. The fiat currency collapse is imminent.
 
 
# Diabloandco 2013-02-23 13:56
I loved the dire warnings about triple A ratings for Scotland being down the Swanee if we were independent.
Now it seems its " nae bother" to Westminster.
Extraordinary!
 
 
# mountain man 2013-02-23 14:02
I cant wait to hear the unionists explain this,it should make for entertaining tv watching them squirm.
 
 
# willie boy 2013-02-23 15:34
As the hapless footsoldiers of the Better Together campaign set off to deliver their leaflets which proclaim the benefits of AAA status delivering cheap mortages, one wonders what is this weekend going through their heads.

Labour for Independence, Business for Independence, Trade Unions for Independence, the Greens, the SSP, all indicate that the message of Independence is recognised and that the BritNat side to Labour and the union is now as illusionary as the fabled AAA.

Vision and the recognition that we can be better is breaking out everywhere and Labour in Scotland is no longer the slavish drudge of London Labour.

This is going to be Scotland's time and honest decent Labour folks who know what a true left of centre, socially inclusive, economically vibrant community is, are heading for the exit door of an ever increasingly impoverished and socially unequal rUK.
 
 
# call me dave 2013-02-23 15:41
There is an updated list of the credit ratings Jan 2013.


guardian.co.uk/.../...

Has flipper Darling thought up a response yet for the fettered together squad!
 
 
# scotsmanc1 2013-02-23 15:48
My Apologies for the mistake in the previous link to Bella Caledonia. I meant to mention the piece by James Maxwell and the article called The Union's Credibility gap.

Hope this helps.

bellacaledonia.org.uk/
 
 
# pomatiaH1 2013-02-23 16:20
This is a bit off the subject but on building international economic trade, it seemed OK for Cameron to go to India to bolster trade and to talk about trade with China. However there has been a curiously nasty slant from newspapers reporting on visits and talks about trade connections to China by the First Minster.
An article in The Times, 23/2/13, begins;
"The Chinese Communist Party and the SNP could soon link hands...", further on,"This urge to get into bed with the Scottish Government is likely to meet with little resistance....".
The whole article suggests that Scotland is sneakily siding with one of the bad guys of the world and has no regards for human rights.
Strange since the Scottish Government supports the Charter of Human Rights in its entirety and the UK Government wants to scrap the Charter and write a different one more convenient to its own requirements. Add to that setting up secret courts.
 
 
# bringiton 2013-02-23 16:28
Debt ratings are only important to countries which have relatively large amounts of debt.The Scandinavian countries have good debt ratings because they have managed their economies in a sensible way (not the Thatcher way followed by the Westminster establishment for many decades).
The undecideds in our referendum must ask themselves if staying with such incompetent economic management is a good idea for our future.
Even if we tried very hard,we couldn't rack up debts of the Westminster magnitude.
 
 
# Rafiki 2013-02-23 16:34
We anticipate the official comment from the No Campaign as they survey the thousands of leaflet telling everyone that SCottish independence would make the UK lose its triple A rating: "A A A ggrrh!"

Is independence here and we haven't noticed?
 
 
# Clydebuilt 2013-02-23 17:19
Quoting call me dave:
Has flipper Darling thought up a response yet for the fettered together squad!


heard Alexander this morning basically saying whatever rating Britain/England gets , Scotlands would be worse!
Had the Treasury up all night working on it.
 
 
# RTP 2013-02-23 17:50
Alexander says

"Of course this is disappointing news but I've always said the credit rating agencies are not the be all and end all.

Can anyone remenber him saying this I can't.
 
 
# Clydebuilt 2013-02-23 17:56
Quoting RTP:
Alexander says

"Of course this is disappointing news but I've always said the credit rating agencies are not the be all and end all.

Can anyone remenber him saying this I can't.


I've heard him saying it recently as it has become apparent that the rating was going to be lost.

check out "call me dave's" money week link it's devastating.

moneyweek.com/.../...
 
 
# Independista 2013-02-23 17:59
Good old Henry McLeish! Vote no. Get nothing!
Wonder if we will see this in tomorrow's MSM?
www.youtube.com/.../
 
 
# call me dave 2013-02-23 19:01
Thanks for this link to Henry.

Very interesting and sets out a positive scenario for Scotland and lays bare the Labour and Tory 'trust us were unionists' and it will be 'Great Jam Tomorrow' promises.

He spoke more sense in 15 minutes than a whole year of Lamont's best bits.
He was kind the her when he said her 'something for nothing speech' was misplaced.

Roll on 2014
@:]
 
 
# Barbazenzero 2013-02-24 12:01
Excellent video which everyone should watch, but you're right that there's nothing in the MSM today that I've spotted.

Somehow I doubt whether Henry is flavour of the month with his own party just now or that La Mont can do anything even to neutralise him.
 
 
# staypos+ve 2013-02-23 19:33
Moody's predict that debt burden peaks in 2016 , triple A lost , the first sticking plaster is off .

Planned cut's will require to be accelerated to hasten a reduction to the growing national debt, I wonder when the Aircraft Carrier program starts to become a potential money saver ? you can guarantee the replacement Trident system will still be protected .
A bankrupt nation will not be welcome or command any influence or respect at any of the top tables the Anti Independence No Campaign keep telling are a major reason to stay together. Another sticking plaster falling off !.
 
 
# rapid 2013-02-23 20:37
I just came across this very interesting document that researches "debt ratio" and the debt risk by households in various regions of the UK.

By my interpretation, it shows that the South East of England would be at the most vulnerable from a 1% rise in the interest rate for secured and unsecured debt. In fact, the South East would be FAR more vulnerable to a rate rise than Scotland. Wales and Cornwall are the least vulnerable...

There's an interactive map tool that shows debt ratios (check out the unsecured debt figures by clicking on the "Select measure and year" -> Surplus/Deficit) stepchange.org/.../atlas.html

I read their white paper on the subject and I guess it is written from the data they collect, the paper is here: stepchange.org/.../...
 
 
# From The Suburbs 2013-02-23 21:54
In response to the unionist eulogies to Bruce Millan we should remind them that as Secretary of State for Scotland he failed to speak out against Labour's undemocratic 40% rule that prevented the 1979 YES to devolution referendum vote being enshrined in law.
 
 
# ynot 2013-02-23 23:00
@ call me dave

But why on earth couldn't Henry see the logical conclusion to his meanderings is to support Labour for Independence? Either he doesn't really care about the outcome of a No vote or he actually believes deep down that Yes will win the day.
 
 
# NkosiEcosse 2013-02-24 10:28
They won't build houses even although we need them as more houses in the market means lower prices on their artificially inflated housing market.
 
 
# proudscot 2013-02-24 12:52
Can anyone recall if Ian Davidson's "Separashun Committee" included among their other anti-independence assertions, that we'd suffer from losing the UK's hallowed AAA credit rating?

Re Henry McLeish, I think he's just becoming fed up, like many other Labour supporters, of the relentless negativity of Lamont's anti-SNP and anti-Sturgeon agenda.
 

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