Britain defiant on triple-A
THE GOVERNMENT is highly confident that Britain will keep its triple-A rating despite Moody’s warning there is a 30 per cent chance of a downgrade, according to a person familiar with Treasury thinking.
The source said there is “no expectation” of an actual downgrade and it is business as usual, despite the more cautious official line. Publicly George Osborne called the move a “reality check” that underlines the urgency of the debt crisis, saying: “Britain cannot waver.”
But the Treasury’s confidence will surprise those who think Britain needs to cut faster. Backbench Tory MP John Redwood said: “Even after the action [the government] is proposing to take they’re still going to be adding £550bn to the debt… and that’s if everything goes well.”
Markets took Moody’s decision in their stride yesterday, with gilt yields barely moving.