Just half of City saw downgrade coming

THE majority of the City was unprepared for S&P’s historic decision to strip the US of its triple A debt rating, according to the City A.M./PoliticsHome Voice of the City panel.

Members of the panel, which has been specially recruited to represent a cross-section of London’s financiers and business people, were interviewed by email last week and all the field work was completed by Friday afternoon – just hours before S&P revealed its decision.

Excluding those who said they didn’t know, fifty-one per cent said they did not believe the US would lose its triple-A rating before the next Presidential election in 2012. Slightly less (48 per cent) correctly predicted a downgrade.

The findings contradicts the received wisdom that financiers were expecting a downgrade and therefore S&P’s decision is of little significance.

However, around two thirds (67 per cent) thought President Barack Obama would still win re-election in 2012 despite the US debt ceiling fiasco, even though the majority (55 per cent) thought his reputation had been damaged.

• City A.M. and PoliticsHome interviewed 398 members of the Voice of the City panel by email last week.