Has George Osborne turned the credit rating agencies?
Yesterday's investment market reaction before and after the budget would appear to be very positive for the UK government with the gilts market reacting as George Osborne would have hoped. There is also a suggestion that credit rating agencies are now far happier than they were 24 hours ago in relation to a structured and realistic plan to tackle the UK budget deficit and sovereign debt. However, there are still some sceptics in the marketplace.
At this moment in time it is very difficult to forecast, with any real confidence, the future direction or the future strength of the UK economy. As a consequence, all forecasts issued by official parties can be open to attack and different interpretations. The truth is that George Osborne and the coalition government need to find a position from which to grow the UK economy and begin to tackle the budget deficit and the ever-growing sovereign debt.
Whether or not current figures in the marketplace, which have actually been downgraded over the last few days, are correct or not remains to be seen but at least the UK authorities now have a basis upon which to tackle the financial problems of the UK.
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