Another day another view on the UK economy
Despite the fact that Neil Woodford, one of the U.K.'s more prominent fund managers, last week suggested that the UK could lose its AAA credit rating, many city analysts have come out with an opposite view. While there is no doubt that Neil Woodford has a history which makes him more than qualified to comment on the UK economy, there is some debate as to whether his assumptions are correct and indeed no more than just a hunch.
There is no doubt that the UK economy is under pressure, the UK budget deficit is out of control and UK national debt is at record levels, but the UK economy is enormous and is potentially on the verge of a turnaround. However, whether we see a reduction in the UK credit rating in the short term is another matter as there is no doubt that investors, both in stock markets and the money markets, are becoming more and more concerned about the lack of clarity and detail about how the government intends to tackle the budget deficit.
With people such as Neil Woodford suggesting a possible downgrading of the UK national credit rating there is a danger that we could talk ourselves into a far worse situation, at least in the short term.
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