Moody’s: Tory EU exit bigger risk to credit rating than election uncertainty
The prospect of Britain leaving the European Union is a bigger threat to the UK economy than uncertainty over the General Election, according to the respected agency
The prospect of Britain leaving the European Union is a bigger threat to the UK economy than uncertainty over the General Election, according to the respected agency
This morning credit ratings agency Moody’s downgraded the Co-operative bank to Caa1. However the bank is still, as far as I am aware, open for business, despite the Prudential Regulation Authority (PRA) being told about the downgrade before the start of business today.
Iceland is a good example of the fallibility of the rating agencies. During Iceland’s financial crisis, no one – and least of all the rating agencies – seemed to wonder why three banks from a tiny island with no history of banking could out-earn foreign banks despite borrowing at a relatively high cost.
While Westminster is absorbed by the difficulties facing Nick Clegg over allegations relating to the conduct of the former Lib Dem chief executive Lord Rennard, it remains the economy that will decide the result of the next General Election.
Sometimes, even abject policy failure doesn’t make much material difference. This is the paradox of the UK government’s loss of its AAA credit rating.
The blame for the downgrading of the UK’s triple-A credit rating by Moody’s can be laid squarely at the door of the government.
Alex Hern reports on yet more news showing the uselessness of credit ratings agencies
Alex Hern explains lessons what we can take away from the Moody’s downgrade of the UK’s economic outlook.