Credit rating warning: George Osborne v Ed Balls

 

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A warning light is flashing. The UK's triple A rating is under threat. The chancellor accepted this morning that "Britain's economic reputation is on the line".

Economically, that means Britain could face not just low growth and rising unemployment but, if the credit ratings agencies do eventually downgrade Britain, higher interest rates too.

Politically, it is another sign - following the revelation last year that the government is way off course to meet its borrowing targets - that George Osborne is currently failing in his own terms - ie: in his efforts to cut the debt and the deficit ahead of all other economic goals.

Yet this morning - as I listened from afar on a half-term break - I couldn't help noticing that this latest news simply led both Messrs Osborne and Balls to say "I told you so".

The chancellor says "I told you how serious our debt problem was" whilst the shadow chancellor tells you "I told you the government was making things worse".

It will be Mr Balls, though, who will feel with some confidence that the arguments are moving his way.

Update 1.20pm: The detail of what Moody's are saying is only just reaching me in the middle of nowhere on my half term break.

What Moody's point out, and the chancellor's people have seized upon, is that a downgrade could follow any "reduced political commitment to fiscal consolidation, including discretionary fiscal loosening".

That, says the chancellor, is why Ed Balls' mantra - spend more now to premote growth - isn't borne out by today's report. Mr Osborne's message remains clear - steady as she goes.

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
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    Comment number 397.

    384/5#

    Do you have anything to contribute at all apart from vinegar veined diatribes, bryhers?

    395#

    You know, I think thats the most sensible post of yours I've ever read. Just shows, you can do it, if you lay off the haikus...

  • rate this
    0

    Comment number 396.

    Nothing to add Nick?
    NHS 'drop the Bill' e-petition hits 130,000 (doubled in last few days). Continued rise in unemployment figures. Perhaps the usual suspects were right (sic) about bias at the BBC. Bias towards a pro Government news management agenda? Only joking... I think.
    [If it's any consolation the Mail editorial yesterday also thought Moody's was a a wake up call for Osborne.]

  • rate this
    0

    Comment number 395.

    So, we're to judge Right v Left by 'today's reports' from 'credit-rating' geniuses

    pdavies65 @1 decries simplistic Osborne, Fubar @3 recalls hubristic Brown

    The Phoney War goes on: whether the devious better than the cunning, and who best deserves which label, the failure is shared with respect to the inclusive society that ALL 'deserve'

    FAR from viable democracy without income equality

  • rate this
    0

    Comment number 394.

    393.IPGABP1

    "...Will their proponents ever learn?..."

    ===

    They often don't need to as the consequences do not affect them.

    Take Libya. Anyone with half a brain could see what would happen when the state was wrecked: much as was also foreseen, and did, in Iraq.

    Today we hear of arbitrary arrest, torture, murder and fear, particularly among women. The BBC affects surprise.

  • rate this
    0

    Comment number 393.

    No291 PPE,
    You seem to be suggesting that the Thatcherite lunacy has been a disaster. Market fundamentalism and its spread throughout the world has heaped untold damage on both developed and under - developed nations. Right wing policies clearly do not work. Deregulation, the Poll tax and Monetarism are other examples. Will their proponents ever learn?

 

Comments 5 of 397

 

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