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Moody rating agency places evil little island in Europe on negative outlook-BBC [Copy link] 中文

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14 February 2012

Moody's rating agency places UK on negative outlook
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The US credit ratings agency, Moody's has placed the UK on negative outlook.

France and Austria, who also share a top triple A rating, have been similarly graded.
The credit ratings of Italy, Spain and Portugal have been downgraded.
In a statement, Moody's blamed the euro area crisis for the adjustments citing the "susceptibility (of selected EU countries) to the growing financial and macroeconomic risks emanating from it."
Responding to the ratings decision by Moody's the Chancellor of the Exchequer said: "This is proof that, in the current global situation, Britain cannot waiver from dealing with its debts."
The coalition government has come under increasing pressure to ease up on its austerity measures in the face of growing unemployment and stalled economic growth.
"Reality check" Continue reading the main story AnalysisNorman Smith Chief political correspondent, BBC News Channel

Treasury sources have sought to play down the significance of the ratings agency Moody's decision to place the UK's Triple A rating at risk.
The source said the decision was not "entirely unexpected" given the difficult economic situation facing the UK. Much of the reason for the potential downgrade was a consequence of the difficulties in tech eurozone.
The source said that Moody's made clear any "discretionary fiscal loosening" would make a downgrade more likely and that this underscored the need for the Government out stick to its deficit reduction strategy.

The Chancellor's statement added: "Moody's are explicit that it is only the Government's 'necessary fiscal consolidation' that is stopping an immediate downgrade, which would happen if there were any 'reduced political commitment to fiscal consolidation'.

"This is a reality check for anyone who thinks Britain can duck confronting its debts."
The BBC's economics editor Stephanie Flanders said that the negative outlook for the UK means Moody's think there is a 30% chance of a downgrade within 18 months.
A negative outlook is not the same as negative watch which means a more than 50% chance of a downgrade.
"There is no suggestion, in the agency's statement, that it would like to see the UK ease up on austerity," said the BBC's Stephanie Flanders.

"Quite the opposite. But the opposition will be quick to note that preserving Britain's top rating has long been a central plank of George Osborne's case for deeper cuts."
"For this ratings agency, at least," says Stephanie, "Britain's triple A is at greater risk now than at any time since Mr Osborne's first budget."

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Post time 2012-2-14 10:44:28 |Display all floors
By DREW FITZGERALD and STEPHEN L. BERNARD Moody's Investors Service downgraded six European nations and became the first ratings firm to warn the U.K.'s rating could be at risk, citing the area's weakening ability to implement measures aimed at reducing debt.
The ratings firm's actions follow similar moves by Standard & Poor's and Fitch Ratings last month where multiple downgrades were made all at once. Like S&P and Fitch before it, Moody's said concerns with the debt crisis, how it is being handled and the impact on the region's various economies were at the heart of the downgrades.
Moody's also noted the fragility of financial markets in Europe and the possibilities of future shocks to the system because of the crisis. The company previously said late last year it would review ratings broadly on European Union members, including those in the union that don't use the common currency.
Where Moody's did deviate from recent actions by other ratings firms was in changing the outlook for the U.K. There had been no indication the U.K.'s outlook was necessarily in danger based on how other ratings firms view U.K.'s debt. Both S&P and Fitch have a stable outlook on their U.K. rating.
U.K. Chancellor of the Exchequer George Osborne said the negative outlook is proof that Britain can't waver from its plans to deal with the country's debt. He said the rating firm was explicit that only thing stopping an immediate downgrade of the U.K. was the government's fiscal-consolidation plan.
"This is a reality check for anyone who thinks Britain can duck confronting its debt," Mr. Osborne said.
The ratings firm downgraded Italy a notch to A3, which is four rungs above speculative-grade territory, and maintained a negative outlook on the euro-zone's third-biggest economy. Malta, Portugal, Slovenia and Slovakia also received one-notch downgrades and still have negative outlooks, Moody's said. Spain was downgraded two notches.
Each of those six countries was downgraded by S&P last month. Fitch downgraded Italy, Slovenia and Spain last month.
While Moody's might have been the last to act, it was the most severe on Portugal and Spain. Among the three biggest ratings firms, Moody's now has the lowest rating on each of those countries.
Concerns over Portugal's debt problems have mushroomed in recent weeks, sending its bond yields to record highs. Moody's downgrade of Portugal sends the country's rating further into junk territory at Ba3, which is three notches below investment grade.
Moody's didn't go as far as S&P when it came to two top-rated euro-zone members, France and Austria. Moody's simply lowered their outlooks to negative, while S&P downgraded each of those countries.
An outlook indicates a longer time horizon, of about two years, in which a ratings action could take place. The maintenance of triple-A ratings from both Fitch and Moody's should alleviate some of the potential pressure on those two countries. Typically investors tied to minimum ratings requirements to hold debt will look to see where the majority of the big three rate debt, so France and Austria maintaining triple-A ratings at Moody's means two of three ratings firms still see them as top-notch investments.
—Ainsley Thomson

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Post time 2012-2-14 15:13:00 |Display all floors

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