Moody's confirms big four Triple-A ratings
Credit rating giant Moody's has today confirmed the Triple-A ratings for the UK, the US, France and Germany and while it has concluded that the risk of downgrades has increased over the last few months, it is unlikely the countries in question will lose their Triple-A ratings.
There is no doubt that the increase in national debt, and the increase in budget deficits, between the big four is concerning the likes of Moody's and investors around the world. The UK government in particular has been reluctant to come forward with a detailed plan of spending cuts and tax rises with many people suspicious the government will act with indecent haste if it is re-elected at the next general election.
Even though Moody's is fairly confident that the Triple-A ratings for the UK, the US, France and Germany will remain intact, there is a balancing act for the governments in question to address in the short term. The need to increase taxes and increase income for governments needs to be tempered with a need to let economies grow and form a firm base. This is where the dangers begin to appear if the balancing act goes wrong and either debt continues to spiral out of control or the economic recovery currently underway falters.
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