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FYI: UK Suffered a Credit Rating Downgrade Yesterday


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You might not know this, because it was no exactly featured very prominently in the business pages

(because they are more interested in talking about online supermarket delivery slots)

But the UK suffered a downgrade yesterday

https://www.bloomberg.com/news/articles/2020-03-27/u-k-rating-cut-to-aa-by-fitch-amid-spending-to-fight-covid-19

 

so I thought I would highlight the bad news....all this spending isn't going to end well!!

 

 

Edited by reddog
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30 minutes ago, reddog said:

You might not know this, because it was no exactly featured very prominently in the business pages

(because they are more interested in talking about online supermarket delivery slots)

But the UK suffered a downgrade yesterday

https://www.bloomberg.com/news/articles/2020-03-27/u-k-rating-cut-to-aa-by-fitch-amid-spending-to-fight-covid-19

 

so I thought I would highlight the bad news....all this spending isn't going to end well!!

 

 

Blame Brexit for more poverty. 

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39 minutes ago, reddog said:

You might not know this, because it was no exactly featured very prominently in the business pages

(because they are more interested in talking about online supermarket delivery slots)

But the UK suffered a downgrade yesterday

https://www.bloomberg.com/news/articles/2020-03-27/u-k-rating-cut-to-aa-by-fitch-amid-spending-to-fight-covid-19

 

so I thought I would highlight the bad news....all this spending isn't going to end well!!

 

 

It was never going to end well.

Not sure I think of this as bad news.  Worse news could be letting them get away with even more. I guess though that in the immediate moment they don't have much choice. 

Didn't Sunak say borrowing would be easy? (I was trying not to listen). Well it just got harder.

 

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6 minutes ago, Huggy said:

Not sure if you've been keeping an eye on the news recently?

Why is COVID any worse for the UK than any other country? 

Edited by Mikhail Liebenstein
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9 minutes ago, Mikhail Liebenstein said:

Why is COVID any worse for the UK than any other country? 

It won't be, the government's actions during it can be, and the rating's agency's opinion therefore can be. They did cite "Brexit uncertainty", along with CV19 issues, but they (or maybe a different one) also downgraded SA yesterday too. I don't think Brexit's going to affect them much?

I think they make this sh#t up TBH

Edited by Huggy
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My personal take, is this is going to come to all countries.

 

I recon Italy, Spain and France are going to be in a whole world of financial pain after this.

 

They are now pushing for a bailout:

https://www.bloomberg.com/news/articles/2020-03-28/france-italy-double-down-on-eu-crisis-tools-resisted-by-germany?srnd=premium-europe

and hoping this crisis will mean that debt is mutualised across the EU (Germany, and particularly the Netherlands, not happy)

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45 minutes ago, Huggy said:

It won't be, the government's actions during it can be, and the rating's agency's opinion therefore can be. They did cite "Brexit uncertainty", along with CV19 issues, but they (or maybe a different one) also downgraded SA yesterday too. I don't think Brexit's going to affect them much?

I think they make this sh#t up TBH

We should have a new referendum after this COVID thing is all over.

It is pretty clear Brexit has failed and couldn't even allow us to source ventilators properly.

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52 minutes ago, Bruce Banner said:

And 100% agree!!!

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58 minutes ago, interestrateripoff said:

Everyone is junk. The costs of a pandemic has never been factored into the finances of any country or business. Maximise the profits and look to the short term.

Just one of my pension funds, having sold out of equities in Oct 2018 to buy back earlier this week is already up £35k....good capitalist..... greed is good... Love Gordon Gekko.... 

I haven't checked the others yet! 

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4 hours ago, Huggy said:

It won't be, the government's actions during it can be, and the rating's agency's opinion therefore can be. They did cite "Brexit uncertainty", along with CV19 issues, but they (or maybe a different one) also downgraded SA yesterday too. I don't think Brexit's going to affect them much?

I think they make this sh#t up TBH

Did you not see the budget financial projections  - GDP down, growth down and borrowing hugely up because ohit on GDP f Brexit. The truth is we were on the verge of being downgraded even before Covid19.

We still have to decide what happens at the end of transition, can we afford BJs Australian (aka no deal) Brexit. Government's own figures are this will cause another 5%  hit on GDP. 

 

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9 hours ago, reddog said:

You might not know this, because it was no exactly featured very prominently in the business pages

(because they are more interested in talking about online supermarket delivery slots)

But the UK suffered a downgrade yesterday

https://www.bloomberg.com/news/articles/2020-03-27/u-k-rating-cut-to-aa-by-fitch-amid-spending-to-fight-covid-19

so I thought I would highlight the bad news....all this spending isn't going to end well!!

What do you think the government should be doing instead for all of the people who will have no income for the rest of 2020 due to the virus?

The downgrade seems fair enough.  But so does the spending (to me).

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5 minutes ago, scottbeard said:

What do you think the government should be doing instead for all of the people who will have no income for the rest of 2020 due to the virus?

The downgrade seems fair enough.  But so does the spending (to me).

The spending is probably the only option, I said as much above, but surely the complaint is that we have lived so far beyond our means for so long, HMG, companies, individuals, (not of course all of those two) and now we have to double down on what many would call a very high level of debt.

"Kindness of strangers" Mark Carney, "Labour didn't fix the roof when the sun was shining" David Cameron, it seems I'm not alone in thinking we ought to try and close some of the gap between our wealth creating ability and the standard of living/quality of public services we are enjoying/expecting.

Not to mention all the posters on here who say we're headed for national bankruptcy.

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6 hours ago, scottbeard said:

What do you think the government should be doing instead for all of the people who will have no income for the rest of 2020 due to the virus?

The downgrade seems fair enough.  But so does the spending (to me).

Well if the financial situation gets out of control that will have a much bigger impact on the life expectancy of the average Brit than the Corona virus.  But I guess that is harder to understand than someone on TV saying they have just been made unemployed.

 

One thing I would not do is offer bailouts to large businesses, or small businesses that have no real point to them.

 

I'm not saying spend no money, but it feels like blank cheques are being given out.  I would also say, when a statement is made to give money, then there should be a corresponding one to say how taxes will rise after this is over.  

 

There should be no QE.

 

 

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15 hours ago, winkie said:

Price of ventilators prise rise from $25,000 to $45,000.?

Neither is a good price for a machine that is just going to keep a dying person alive for a little longer rather than change the course of the disease. But with coronavirus we are past the point of rationality and into madness of crowds territory so why not, money is no object.

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5 hours ago, reddog said:

Well if the financial situation gets out of control that will have a much bigger impact on the life expectancy of the average Brit than the Corona virus.  But I guess that is harder to understand than someone on TV saying they have just been made unemployed.

 

One thing I would not do is offer bailouts to large businesses, or small businesses that have no real point to them.

 

I'm not saying spend no money, but it feels like blank cheques are being given out.  I would also say, when a statement is made to give money, then there should be a corresponding one to say how taxes will rise after this is over.  

 

There should be no QE.

 

 

Problem here. Who gets to decide on which businesses are pointless and what constitutes large exactly?

Pointless looking businesses are not exactly rare in Britain, how much of anything would be left under your plans?

I don't like it any more than you do but maybe it's better to pay businesses to do something stupid than pay them to do nothing at all. With all that time on their hands the ex employers and employees might become dangerous or criminal.

 

 

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The problem with all this goverment spending is that it is not intended to help people or stimulate economy but to keep inflated assets prices so riches get richer and poor get poorer.

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This is worse for the UK because the UK has implemented a laissez faire response. https://www.bloomberg.com/news/articles/2020-03-17/pound-traders-bet-against-u-k-laissez-faire-response-to-virus

The lockdown isn't on a level with Wuhan's (so not tough enough) and the other key plank of suppression is in chaos because the government ********* up in January. https://www.ft.com/content/fa747fbd-c19e-4bac-9c37-d46afc9393fb

So basically, we are in trouble - and the financial markets have noticed. Really can't see how the virus can be suppressed with the lockdown we have (which was introduced weeks to late) and the huge gaps in testing. 

Then there are ventilator shortages and so on. A lack of ICU beds. And on and on. 
 

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Another problem is how long realistically, can we lock down for.

This virus is highly unlikely to just disappear, we can't stay in lockdown for the next year or even years.. 

The goverment should increase capacity of ventilators/ICU beds and once achieved, allow people their freedom again.

Looking to italy now and Mexico social unrest is occurring, within a month I can see crime going through the roof, criminal gangs will be planning right now...

We are unlikely to find a vaccine in such a short time and these things need proper testing, I personally wouldn't take it, if its rushed through.

There are 8.7mill over 70s, italy is reporting 8-10% death rate, long term these people will be scared to come out of the house. So either sombody finds a vaccine in 6 months or young people will just say they are going out and older people will have to isolate for the foreseeable future.

The whole economy and lives of young people cannot be put on hold long term...

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12 minutes ago, Speed1987 said:

Another problem is how long realistically, can we lock down for.

This virus is highly unlikely to just disappear, we can't stay in lockdown for the next year or even years.. 

The goverment should increase capacity of ventilators/ICU beds and once achieved, allow people their freedom again.

Looking to italy now and Mexico social unrest is occurring, within a month I can see crime going through the roof, criminal gangs will be planning right now...

We are unlikely to find a vaccine in such a short time and these things need proper testing, I personally wouldn't take it, if its rushed through.

There are 8.7mill over 70s, italy is reporting 8-10% death rate, long term these people will be scared to come out of the house. So either sombody finds a vaccine in 6 months or young people will just say they are going out and older people will have to isolate for the foreseeable future.

The whole economy and lives of young people cannot be put on hold long term...

A vaccine is likely to be available by the time this could be done. It is competent staff not ventilators that will be the limiting factor.

If there are multiple examples of other countries successfully containing the virus it would not be possible for a government to survive a policy of letting the virus rip. What happens in China as it reopens will decide our policy.   

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1 hour ago, gruffydd said:

This is worse for the UK because the UK has implemented a laissez faire response. https://www.bloomberg.com/news/articles/2020-03-17/pound-traders-bet-against-u-k-laissez-faire-response-to-virus

The lockdown isn't on a level with Wuhan's (so not tough enough) and the other key plank of suppression is in chaos because the government ********* up in January. https://www.ft.com/content/fa747fbd-c19e-4bac-9c37-d46afc9393fb

So basically, we are in trouble - and the financial markets have noticed. Really can't see how the virus can be suppressed with the lockdown we have (which was introduced weeks to late) and the huge gaps in testing. 

Then there are ventilator shortages and so on. A lack of ICU beds. And on and on. 

The £ has recovered since the change in policy, although we will still pay a high price for the 2 weeks of dithering. 

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  • 417 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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