Spain suffers cut from Standard and Poor's
Credit rating agency Standard and Poor's has today reduced the credit rating on Spanish national debt from AAA to AA. This is a major blow for the Spanish economy and the Spanish government and comes amid signs that the Greece debacle is now affecting other European economies. Yesterday we saw Portugal suffer the indignity of a credit rating downgrade and experts believe more downgrades are on the way.
The ongoing problems within the Eurozone have impacted upon the euro itself which has come under significant selling pressure over the last few days. Despite the fact that only a few days ago it looked highly unlikely that any European country would default on its national debt, the chances of this happening have increased dramatically over the last 48 hours. There is also concern that the global economy could be impacted by the debt problems within Europe and we could move back towards another worldwide economic downturn.
Even though the UK stock market was fairly steady today, compared to yesterday, we did see significant falls in France, Germany and Spain and there is growing concern amongst investors. Despite the fact that the German authorities appear to have been dragging their heels regarding a solution for the Greek debt problem, it was the German government who today called for a "speeding up" of negotiations between the Greek government, the IMF and the European Union.
Vince Cable cuts automotive industry adrift
Business secretary Vince Cable has this evening cut adrift the UK automotive industry with a suggestion that state aid for the sector has come to an end. This is an unwelcome reminder of forthcoming cutbacks in the UK government budget although it has to be said that previous assistance offered by Gordon Brown and his Labour government did prove very successful and did put the sector back on a mor...Read More
Mervyn King issues downbeat statement on UK economy
Even though today's statement from Mervyn King was effectively leaked to the press some time ago, the inflation report from the Bank of England monetary policy committee pours cold water on hopes of a short term recovery in the UK economy. In an admission that the recession has been deeper than previously estimated, Mervyn King believes that the recovery process will be more prolonged than first t...Read More
Should the regulators have forecast the ongoing recession?
As the FSA releases details of the criteria used in various stress tests amongst UK financial companies, there is a growing debate as to whether the UK regulator should have been able to forecast the current demise of the UK economy as a whole. Even though we are currently in a situation which has never been repeated in the modern era there are various aspects which have appeared in the past, most...Read More
How long will it take to repair the UK PLC balance sheet?
Over the last few weeks there has been one headline in the financial press and that is public sector spending and the massive cuts already announced by the UK government with more to follow. Many people have also been focusing upon the ever growing national debt in the UK which is now expected to top £1 trillion in the short to medium term. So how long will it take to repair the UK PLC balance sh...Read More