Friday, 8 January 2010

More "unpatriotic" comments for Mr Brown to criticize - UK losing AAA rating is “more likely now than it has ever been”

Gordon Brown has taken to calling negative comments about the state of the UK economy and its public finances "unpatriotic". Accordingly the following comments from Neil Woodford, head of investment at Invesco Perpetual ,who said on a conference call Friday (8th) (as reported in the Daily Telegraph here ) that there was a “high probability” of Britain losing its AAA credit rating, must be almost on a par with high treason!

“I would argue that there is a high probability... a decent chance that we will be downgraded, and it is a near certainty if we do not, in the wake of the next election, properly deal with the deficit. There are some major challenges here. If we do not take the medicine, there will inevitably be a downgrade. If we do, we have a chance of escaping a downgrade.”

Mr Woodford said: “I do not believe we have the ingredients for a sustainable economic recovery. The bank-crisis resolution period is likely to be very long and drawn-out.”

A rating downgrade, he added, “would be pretty tough for the economy, because, of course, it would mean that we would end up paying more for our borrowing, which would make the deficit more expensive... some pressure would be brought to bear on the currency, which could take a bit of a knock. It has already fallen quite a long way but it could fall further.”

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