US government may lose Triple-A rating
News that the US government may lose the vital Triple-A rating which the United States has enjoyed for some time sent shockwaves through US stock markets as the ferocity of the economic downturn finally began to hit home. While there does not appear to be any short-term likelihood of a downgrading of the AAA rating there are serious concerns for the future.
The long weekend in stock markets around the world has also given analysts and investors time to consider the impact a downgrade of the US credit rating would have on the worldwide market. It will be interesting to see how investors react when markets open next week as the next few weeks could be volatile to say the least. This comes hot on the heels of a suggestion that Standard and Poors may well be looking to downgrade UK national debt at a time when the UK economic overdraft continues to increase.
Governments around the world will be keen to avoid a downgrading of their own credit ratings as they have the potential to lengthen recessions and curtail any short-term potential for recovery. While a week is a long time in politics, a day is a long time in the US and worldwide investment markets!
Share this..
Related stories
Is Mervyn King On Probation?
As the economic crisis in the UK deepens there is a strong belief that once the economy shows any sign of recovery Mervyn King, the Governor of the Bank of England, will be shown the door. His various committees at the Bank have refused steadfastly to carry out a number of changes which the government has suggested, such as reducing interest rates to refloat the UK economy.
While t...
Public spending in UK set to suffer
The £50 billion deal which has been announced today will see the deficit for the public purse rise to near £100 billion for the current tax year with a further rise expected next year. This will see UK debt rise to over £600 billion and place severe pressure on public spending for the next decade. Much of the money which has been lent and wasted over the last decade will need to be repaid whi...
Read MoreWhy have tax revenues collapsed so dramatically?
While you would expect tax revenues to fall significantly during a recession, the enormous collapse in UK tax income has shocked even those more experienced observers of the UK economy. So why have tax revenues collapsed so dramatically in the UK and what can be done to turn around this situation? When you consider that 2 million Britons have either accepted pay cuts or reduced hours over the l...
Read MoreHometrack finds further house price fall
House prices have fallen by one per cent this month, Hometrack said today.The property research company also claimed that the average price now stands at 3.2 per cent below that of June 2007.In addition, the Hometrack data shows that new buyer registrations have fallen by over 50 per cent - providing further evidence that fewer people are willing to get on the property ladder due to the credit cru...
Read MoreUK government to challenge EU over insurance rules
The UK government is set to challenge the EU commission head-on with regards to solvency II rules which are set to be introduced to the European marketplace in the short term. The UK government believes that these "over conservative" solvency rules will see UK insurance companies having to shore up their reserves by up to £50 billion. There will obviously be a cost to this additional reserve requ...
Read More