Britain loses its triple A credit rating as pound plunges

[webfact]

Britain loses its triple A credit rating as pound plunges



LONDON: -- Uncertainty over when and even if Britain is leaving the EU hammered London’s financial markets on Monday.

At one point sterling hit at 31 year low against the dollar, falling to just 1.31 dollars. In all forty billion dollars has been wiped off the value of Britain’s biggest companies since the vote to leave result on Friday.

The ratings agency Standard and Poor’s was quick to react, stripping Britain of its triple A grade investment rating down to AA.

S&P said it was the first time it had chopped an AAA-rated sovereign credit rating by two notches in one go.

There’s been great political uncertainty after prime Minister David Cameron’s resignation created a leadership vacuum which won’t be filled until September.

Meanwhile Jeremy Corbyn, the leader of the opposition Labour party, is facing a leadership challenge as support for him melts away.

-- (c) Copyright Euronews 2016-06-28

[MJP]

Oh well never mind.

[jippytum]

The people who decide the ratings ...Standard and Poor and Moodys for example gave a triple A rating to Leman Brothers, Bernie Madoff and his ponzy scheme and dozens of others prior to the 2008 crash . The UK deserves a downgrade but the rating agencies are not always a true indication of fact.

[neverdie]

AA still a good rating. My guess is it's a lot better rating than what they will get for their Brexit Strategy Plan, which at this stage appears to be a pair of dice, a blindfold and a tub of personal lubricant.

[bkkcanuck8]

The people who decide the ratings ...Standard and Poor and Moodys for example gave a triple A rating to Leman Brothers, Bernie Madoff and his ponzy scheme and dozens of others prior to the 2008 crash . The UK deserves a downgrade but the rating agencies are not always a true indication

of fact.

The rating agencies were hesitant more than they should have been due to conflict if interest with several of the institutions - which lead to inaccurate and fraudulent ratings.... What is the conflict of interest that is causing this not to be a true indication?

[webfact]

UK credit rating slashed, Cameron insists economy is robust
By JILL LAWLESS and DANICA KIRKA

LONDON (AP) — Prime Minister David Cameron insisted Monday that Britain's shock vote to leave the European Union won't send the economy into a tailspin, even as the country was stripped of its top credit rating and stock markets and the pound continued a downward spiral.

Calling the vote a "seminal event" that "will lead to a less predictable, stable and effective policy framework in the U.K," Standard & Poor's knocked the U.K.'s sovereign rating by two notches, from AAA to AA. Hours later, Fitch Ratings followed suit, downgrading the country to AA, from AA+.

Both agencies said they were keeping a negative outlook on their ratings, which means they could downgrade the country further. Standard and Poor's cited risks to the economy and public finances, the pound's role as an international reserve currency and "risks to the constitutional and economic integrity of the U.K." as Scotland's strong vote to remain in the EU could raise the prospect of another referendum on Scottish independence.

Speaking earlier in the day as the House of Commons met for the first time since last week's referendum, Cameron insisted the British economy was robust and could withstand the shockwaves.

"It is clear that markets are volatile, there are some companies considering their investments and we know this is going to be far from plain sailing," Cameron told lawmakers. "However, we should take confidence from the fact that Britain is ready to confront what the future holds for us from a position of strength."

Despite the uncertainty fueling financial instability, leaders in both Britain and the EU signaled there would be no immediate start to negotiations on an EU exit.

German Chancellor Angela Merkel met with her French and Italian counterparts and said "we agree there will be no formal or informal talks" until the British government officially declares its intention to quit by invoking Article 50 of the EU treaty.

The statement appeared to scotch hopes by Conservative lawmaker Boris Johnson and his Vote Leave campaign to hold preliminary talks on the general outlines of a deal before Article 50 triggers a two-year countdown to a British exit.

Earlier, Merkel said she understood that Britain may need "a certain amount of time to analyze things," but said a "long-term suspension" of the question wouldn't be in either side's economic interest.

Cameron announced last week he would resign by the fall after failing to persuade a majority of voters to back continued EU membership, saying his successor should be the one to navigate Britain's departure from the EU.

Cameron said he spoke Monday with Merkel and French President Francois Hollande, and made plain this was not the time to start the process.

"We have discussed the need to prepare for the negotiations and in particular the fact that the British government will not be triggering Article 50 at this stage," he said.

Meanwhile, U.S. Secretary of State John Kerry, in Brussels and London to address fallout from the vote, said the U.S. has "immense confidence in ... the leadership on both sides of the channel" to negotiate a deal — and urged the EU not to treat Britain in a "revengeful" manner.

Amid signs the uncertainty was hitting business confidence, a leading business group said 20 percent of its members planned to move some of their operations out of the U.K. The Institute of Directors said a survey of its 1,000 members showed three out of four believe Britain's exit from the EU will be bad for business. About a quarter said they would freeze hiring and 5 percent said they would cut jobs.

"Ultimately we think that our members are very resilient, we think that British business is tough and will adapt, but certainly at the moment there is a lot of nervousness," said Edwin Morgan, the head of media relations.

The pound hit a new 31-year low Monday, dropping another 3.5 percent to $1.3199, while stock markets declined across Europe. Bank shares were particularly hard hit. Shares in Royal Bank of Scotland, once the world's largest bank and now mostly state-owned after a taxpayer bailout in 2008, closed 15 percent lower after dropping by as much as 25 percent.

Treasury chief George Osborne pledged not to impose a new austerity budget — even though he warned earlier that would be necessary if the "leave" side prevailed — saying the next budget would be the task of Cameron's successor.

Osborne said he was working closely with Bank of England Governor Mark Carney, fellow finance ministers and international organizations, and "we are prepared for whatever happens."

Meanwhile, Cameron chaired an emergency Cabinet meeting Monday and announced the formation of a special civil service committee to oversee talks on what is popularly called Brexit.

"Leave" campaigners haven't set out what relationship Britain should have with the bloc: whether to try to remain in the EU's single market in return for accepting its rules, or a looser arrangement that could see trade tariffs imposed on Britain.

The financial markets' jitters are due in part to this uncertainty.

Cameron said there was "a very strong case" for trying to remain in the single market — "but that's going to be a decision for the new government and for the Parliament."

The referendum has left Britain deeply divided, and some among the 48 percent of voters who wanted to stay in the EU were pushing for a second referendum.

Cameron said that won't happen.

The vote was "not the outcome that I believe is best for the country I love," he said, but it has to be respected.

"We have to accept the result, we have to get on and deliver it and as we do so, we have to seek the best possible deal," he said.

Authorities reported an increase in cases of racial and xenophobic abuse after an emotionally charged campaign focused heavily on immigration. Police were investigating incidents including racist graffiti on a Polish community center in London and leaflets attacking "Polish vermin" distributed in eastern England.

Meanwhile, opposition leader Jeremy Corbyn faced upheaval within his Labour Party after more than 20 advisers quit his inner circle, calling on him to resign.

Corbyn insisted he would not step down, maintaining he still retains grassroots party support.

Many Labour lawmakers accuse Corbyn of running a lukewarm campaign in support of remaining in the EU. They also fear the left-winger cannot win a general election, which could come in the fall if Cameron's successor calls an early election to solidify a mandate before negotiating Britain's EU exit.

The vote was also causing a political schism, with Scottish First Minister Nicola Sturgeon saying she would consider whether to advise the Scottish Parliament to use its power to try to prevent Britain from leaving the EU by withholding "legislative consent."

Some 62 percent of Scots voted to remain in the bloc, and Scottish National Party lawmaker Angus Robertson told the House of Commons that Scots did not want to stay in "a diminished little Britain."

"We have no intention whatsoever of seeing Scotland taken out of Europe," he said. "We are a European country and we will stay a European country."

___

Associated Press writers Geir Moulson in Berlin and Leonora Beck in London contributed to this report.


-- (c) Associated Press 2016-06-28

[SgtRock]

Some 62 percent of Scots voted to remain in the bloc, and Scottish National Party lawmaker Angus Robertson told the House of Commons that Scots did not want to stay in "a diminished little Britain."

"We have no intention whatsoever of seeing Scotland taken out of Europe," he said. "We are a European country and we will stay a European country."

Nice to see that Angus ( Is his Commons credit card been unblocked yet ) Robertson is another one who cannot differentiate between Europe and the EU.

[Jonmarleesco]

Given the ratings agencies were culpable in the 2008 crisis, their view of things can hardly be said to be reliable.

[ilostmypassword]

The people who decide the ratings ...Standard and Poor and Moodys for example gave a triple A rating to Leman Brothers, Bernie Madoff and his ponzy scheme and dozens of others prior to the 2008 crash . The UK deserves a downgrade but the rating agencies are not always a true indication

of fact.

The rating agencies were hesitant more than they should have been due to conflict if interest with several of the institutions - which lead to inaccurate and fraudulent ratings.... What is the conflict of interest that is causing this not to be a true indication?

I think Brexit is a bad idea but the ratings agencies opinions about the safety of a nation's bonds are worthless. Look to the market. I believe that the UK's gilt-edged bonds are still selling at or near record low rates of interest. Remember that the UK borrows in its own currency that it controls so it will never be unable to pay back on its bonds.

[sujoop]

Stop hemorrhaging unto the foreseeable future.

Time for a new election, the #1 issue:

'Activate article 50'

OR:

'Renegotiate with EU'

Meanwhile, sober second thoughts are mounting:

'Sun columnist and prominent Brexit cheerleader Kelvin MacKenzie has said he now feels

buyers remorse over the vote to leave the EU and is fearful of what lies ahead.'

http://www.theguardian.com/media/mediamonkeyblog/2016/jun/27/regrets-ive-had-a-few-kelvin-mackenzie-and-the-great-brexit-u-turn

[robblok]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Edited June 28, 2016 by robblok

[Steely Dan]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

[MJP]

AA still a good rating. My guess is it's a lot better rating than what they will get for their Brexit Strategy Plan, which at this stage appears to be a pair of dice, a blindfold and a tub of personal lubricant.

It's just like the Automobile Association or . . . Alcoholics Anonymous, or American Airlines.

[MockingJay]

Don't we all LOVE those trustworthy rating agencies...

[dunroaming]

Standard and Poors downgrading is in part because of the threat that Scotland may leave the UK. It is not all about the pound. However the Brexit voters won't care about such things or in many cases even understand what it all means.

[MJP]

Standard and Poors downgrading is in part because of the threat that Scotland may leave the UK. It is not all about the pound. However the Brexit voters won't care about such things or in many cases even understand what it all means.

My monthly household budget costs for Thailand have gone up a whopping £40! Forty blimin' quid!

We're staring into the abyss.

[neverdie]

AA still a good rating. My guess is it's a lot better rating than what they will get for their Brexit Strategy Plan, which at this stage appears to be a pair of dice, a blindfold and a tub of personal lubricant.

It's just like the Automobile Association or . . . Alcoholics Anonymous, or American Airlines.

Australian Arzeholes?

[neverdie]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

You ain't English, Welsh or Cornish, you do not LIVE in the UK...Bugger off............

I'm not one of these disadvantaged groups you speak over either gov, does it mean I need to bugger off too?

[neverdie]

Standard and Poors downgrading is in part because of the threat that Scotland may leave the UK. It is not all about the pound. However the Brexit voters won't care about such things or in many cases even understand what it all means.

My monthly household budget costs for Thailand have gone up a whopping £40! Forty blimin' quid!

We're staring into the abyss.

It's alright for you guys that get massive 6 figure salaries, but what about poor old retired public servants like me that only ear 5 figures?

How am I suppose to upgrade to the 2017 AMG 63 when its released? Have you seen how they're taxed in Thailand.....I will end up with one that doesn't have the sport seats or something. Cripes.

[MissAndry]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Unprofitable companies usually dump their loss making subsidiaries in an attempt to regain profitability.

England's biggest liability EU = gone.

Next two biggest liabilities = Scotland and NI in hand.

Can't see a problem myself!

Edited June 28, 2016 by MissAndry

[MJP]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

You ain't English, Welsh or Cornish, you do not LIVE in the UK...Bugger off............

I'm not one of these disadvantaged groups you speak over either gov, does it mean I need to bugger off too?

YES!

[MJP]

Standard and Poors downgrading is in part because of the threat that Scotland may leave the UK. It is not all about the pound. However the Brexit voters won't care about such things or in many cases even understand what it all means.

My monthly household budget costs for Thailand have gone up a whopping £40! Forty blimin' quid!

We're staring into the abyss.

It's alright for you guys that get massive 6 figure salaries, but what about poor old retired public servants like me that only ear 5 figures?

How am I suppose to upgrade to the 2017 AMG 63 when its released? Have you seen how they're taxed in Thailand.....I will end up with one that doesn't have the sport seats or something. Cripes.

It's a good job I overhauled the knackered 2004 two door D-max and knackered 2005 4-door D-Max middle of last year. Can't afford new seat covers now though, have to save a few more years.

Probably have to get a new tractor though.

[BuaBS]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

Wait 'till the Scots find out how much they have to pay to stay in the EU-club.... all their oil money poof ...gone.

And they may even have to start up the whole process to be a member state of the EU , again. ....Turkey will be an EU member before the Scots

How can Britain be downgraded.... they print their own money... garantied interest payments.

[Grouse]

All just scaremongering!

I'm sure it will blow over.....

I see Boris want's back into EU free trade even at expense of doing nothing about immigration!

Fools

[Grouse]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

Any references? I suspect that was before the vote to avoid Scots pushing for Brexit to trigger a referendum

[ilostmypassword]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

You got a source for that?

[Wilsonandson]

The panic is over. Google U.K news. The pound is rising. The stock market is rising. The house prices are unchanged. The sh1t storm is over.

Don't think the U.K is alone in this Brexit idea. Half of Europe wants out. This is the beginning of the end of the E.U.

You think us British would crumble to dust. No.

We got spirit.

Now watch Nigel Farage put it up them!

[ilostmypassword]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

You got a source for that?

I guess the answer is "no."

[Jip99]

I wonder how much more the English will suffer if the Scots vote to leave the UK, what I have read that will be an other massive blow. I think economically it makes no sense at all leaving the EU. Sure you will get freedom but at what cost. I do hope the Scots are smart enough to leave the UK and join the EU.

I don't like many of the EU rules.. but for trading and economics it makes sense to stay in a block like the EU, alone the UK is not much even less so if Scotland goes, I wonder how that will influence the pound and the GDP.

Before the Scots jump ship they had better check which port to sail to, Belgium and Portugal both said they would veto Scotland alone from joining the EU.

You got a source for that?

You can start with this Telegraph piece from 2014:-

http://www.telegraph.co.uk/news/uknews/scottish-independence/11054187/Spain-and-Belgium-would-veto-an-independent-Scotlands-EU-membership.html

[GAZZPA]

I am confident that the stupid panicking will pass. The markets are so volatile nowadays, all sentiment with no substance. It used to be that currencies, share prices and subsequently company values was based upon their profitability and factual information not just sentiment.

Anyway, the dust will settle eventually.

My hope is that Britain has done the right thing but whether or not it leaves the EU is absolutely not decided despite the referendum. It is not legally binding and if a deal is struct that makes sense then I can see a turnaround, and I do not buy for a minute that the EU will not talk to Britain about this before article 50.

At the end of the day the EU was failing, anybody can see that. The wealthier states were doing ok, but not great and the poorer states, mostly Southern such as Spain and Greece have horrendous economies with something like 40% of younger adults unemployed. How is this a glowing example of EU membership? How have those countries benefitted.

The EU needs a big shake up and serious reform, it needs to behave like what it was meant to be, European countries united under a common purpose to support trade, employment, freedom of movement all to the benefit of each others economies. This is not what we have today, what we have a big bureaucratic mess with the whole continent limping along and a failed single currency.

So, I think Britain has been brave, it will weather the storm for sure and if it means the EU wakes up and starts asking the proper question of "why did we potentially lose the UK" maybe things will start to change.

If they do not change then Britain is better of out. it can negotiate with individual countries, do trade deals directly with the fasted growing Asian countries, manage its own immigration policies, manage its own welfare state without any restriction imposed.

I hope that I am right.