Ratings agency Standard & Poor’s lowered its outlook on Britain to negative on Thursday, citing government debt that would be hard to rein in and political uncertainty about the policy response with an election looming.
The agency affirmed Britain’s ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings.
“We have revised the outlook on the UK to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100 percent of GDP and remain near that level in the medium term,” Standard & Poor’s credit analyst David Beers said in a statement.
The US should not be far behind. Given our massive debt load I think the AAA rating on Treasuries is unjustified.
US pays 3.4% and UK pays 3.7% on 10 yr bonds….. great rates in historical terms….. no need to panic
Except that in the United States we are printing money as fast as they can load the paper and ink into the machines. If there is even a modest spike in inflation those bonds will be effectively returning a negative yield. And I expect the spike in inflation is going to be more than modest.