Another one bites the dust: The UK is no longer AAA, at least according to Moody’s.The primary irony, of course, is that this happened under a government committed to fiscal consolidation.
David Cameron was praised for promoting austerity by commenters in the US who urged Obama to do the same.
Now both the US and the UK are downgraded. Main difference is that the UK economy is going into a triple dip recession.
Of course the downgrade isn’t likely to have a big impact, except it may accelerate selling on the already weak British pound.
And there’s the real story. There’s a big confluence of negativity towards the UK right now. It’s seen as being in a similar boat to the US, except with more exposure to the slumping Eurozone, and no domestic energy boom. In fact its trade deficit is widening thanks to a worsening energy balance.