George Osborne has suffered his biggest blow yet as chancellor after the UK lost its triple-A rating, which he had repeatedly promised to protect. Moody’s, the rating agency, downgraded the UK one notch to Aa1 late on Friday night in the most serious critique yet of the government’s entire economic plan.
|George Winifred Osborne: hoist by his own petard|
Moody’s’ decision is highly politically damaging for the chancellor, who has pinned his credibility on retaining the trust of the bond markets. Last July, he hailed the UK’s credit rating, calling it “a reminder that despite the economic problems we face, the world has confidence that we are dealing with them”. The Conservative manifesto in 2010 promised: “We will safeguard Britain’s credit rating with a credible plan to eliminate the bulk of the structural deficit over a Parliament.”
With the current structural deficit likely to remain until 2018 at the earliest, both of these promises have now been broken.
Financial Times (edit)