… But the big chop could be a couple of years down the line.
From Reuters on Friday:
HONG KONG (Reuters) – The top sovereign credit ratings of Britain and the United States are not under threat of a downgrade right now, but a worst case scenario foresees a cut by 2013, analysts from Moody’s Investors Service said on Friday.
“Only the UK and the U.S. are classified as ‘resilient,’ rather than ‘resistant.’ Their resiliency will be tested in the next couple of years, but for now they have a high degree of financeability and debt affordability,” the analysts said in a presentation.
We already know that Moody’s, which splits off AAA-rated sovereign issuers into three categories, views the US and UK as more at risk of a downgrade than France and Germany, both of which are classified as “resistant”.
We also know that the UK’s “high degree of debt financeability”, a rare plus in an otherwise gloomy prognosis issued earlier this week by the ratings agency, is being helped by a quantitative easing policy that will have to stop over the next two years.
But at least some people will be happy. News of Moody’s pledge to keep the UK AAA-rated until after the election will presumably be music to the ears of the British government.
Related links:
The UK’s heading one (AA) way, Citi says – FT Alphaville
Testing the AAA boundaries – FT Alphaville
RBC visualises a UK sovereign downgrade – FT Alphaville