Meet the men who could trigger the Chancellor's bad trip
When it comes to the budget deficit it can feel, at present, like Britain's getting flashbacks from every bad trip we've ever had - Black Wednesday, Harold Wilson's devaluation, Jim Callaghan at the airport...
There is an atmosphere of impending crisis - some fear manufactured - where the City gangs up on Whitehall; where hands are forced; where political reality meets financial reality, and the money wins.
Mervyn King gave the government an extra head-spin on Tuesday when he threw in a quote from his opposite US number, Ben Bernanke.
"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth. The Chancellor has made clear that the Spring Budget provides the opportunity to do precisely that."
Translated out of Mervynese, this means he wants more clarity about the path to a sustainable budget deficit - he has said before that the government needs to do more. In fact translated even more it simply means: I am on your case.
Who are these agencies?
In the nightmare scenario, the waking up in a sweat screaming moment for any politician is when the credit rating agencies, jointly or severally, downgrade Britain's credit rating.
This is currently AAA and always has been, which means lending to the UK government carries a zero risk of default.
But who are these agencies? What right have they to say to an elected government that it needs to do more? And are their methods sound?
I've been finding out.
It would be wrong to say "three faceless men could plunge Britain into political chaos" - but let me put it this way: Fitch, S&P and Moody's are the authoritative ratings agencies.
At each one there is a sovereign risk team where the top guy will call a committee meeting and there will be a vote (in order of seniority, from junior to senior) on whether the UK meets their published definitions of a AAA economy.
If it goes against, the day after that, whoever is chancellor will not be very happy.
Poachers turned gamekeepers
At Fitch, David Riley is the man who will sit at the head of the table. He is an economist by trade.
Most people in these teams tend to have backgrounds in central banks, country treasuries or places like the IMF. They are, in other words, poachers turned gamekeepers.
Mr Riley's verdict on the UK is that: "Halving the deficit over four years delays debt stabilisation and leaves public finances vulnerable".
Because of this Mr Riley thinks there is a "close-to but lower-than 50%" chance that he will downgrade the UK this year.
He just doesn't think Alistair Darling's PBR plan plots a credible path to a sustainable level of debt.
On the government's own measure debt will peak at just under 80% of GDP; on the Maastricht Treaty measure the City uses, it is closer to 90%.
Either way, for Mr Riley this is the key metric and 90% is unsustainable.
A few stops along the London Underground, at its Canary Wharf HQ, Moody's sovereign debt chief paints me a different picture:
Pierre Cailletau says there are two key factors: first, and measurable, is the affordability of a country's debt.
Mr Cailletau is confident that, because debt servicing costs are low, and Britain's government borrows in with long-term IOUs, it is manageable.
(Right now Britain's debt servicing costs are set to peak at around 3% of national income according to the Institute for Fiscal Studies, then fall back to 2.5%.
But there is another layer of reasoning - unsettling to many politicians but crucial to both men's view of their role.
They are, essentially, political economists. They have to take a view on whether a country like the UK has social cohesion, whether there is a long-term political consensus over fiscal stability, a stable party system, the rule of law etc.
They have, in other words, to look people like Alistair Darling in the eye and say "I don't believe you're going to do what you say".
This is unusual for private sector economists to have to do. But it is what makes their judgments inevitably nuanced and to an extent subjective: both agencies have pointed me to extensive methodology documents to explain how the decisions are come to.
(Standard & Poor's, for the record, refused to speak on or off camera for this report. It is the only agency that has put the UK on negative credit watch.)
So, what we know is that the agencies have the UK - together with France and Spain and of course Ireland and Greece - under surveillance.
But you cannot read off from this the idea that "the City" has "lost faith in Alistair Darling".
Steven Major, HSBC's global strategist on sovereign debt, believes the rating agencies and the markets are systematically under-valuing Britain's debt.
"The chances of Britain defaulting are zero. Yet the only thing a rating measures is that chance. There will not be a downgrade," he says.
He believes the methodologies of the agencies are open to question. Above all with Britain, he believes, a "true sovereign" country can tax, print money or devalue its currency to avoid default.
While this poses risks to some investors, above all the roughly 36% of UK gilt holders who are based abroad, it is not the same risk as that measured by the agencies.
If all this sounds arcane, remember it is political. Even Mr Riley, whose judgements are being brandished around by those who want Britain to cut spending faster, says it would be no tragedy if Britain lost its triple-A status.
It's a choice, he says: Japan lost its AAA and has debt at 200% of GDP but it can still borrow.
Benefit of the doubt
All the ratings bosses are keen to emphasise that they are not trying to dictate to governments: only to explain what will happen if the government fails to spell out a credible fiscal strategy.
In fact, both Mr Riley and Mr Cailletau use the same phrase: we are giving Britain the benefit of the doubt.
What they all worry about is political instability. There is a large wedge of fiscal pain to be borne between 2014 and 2017 that will have to be either tax or cuts - if there was an unresolved political debate about tax versus cuts, and a hung parliament, it is virtually certain the agencies would downgrade.
In that circumstance, says Mr Major, what you are then looking for is a downgrade spiral: markets lose faith, government fails to act, then a further downgrade that significantly hikes the cost of borrowing.
What's certain is that there is pressure on the government to cut faster and more transparently. But even those exerting it are aware it is a double-edged sword.
As one pension fund manager, who holds billions of pounds of UK debt put it to me off camera:
"Right now, to protect my pensioners, I will probably force the government down the path of greater austerity. But further down the line I know those same pensioners will suffer because of health and social care cuts. But I can't help it."
Thinking the unthinkable
There is of course an easy argument to make against the agencies: that they got it wrong over the complex credit products that fuelled the subprime boom and bust, in some cases, as the US SEC has reported, culpably.
But it is an easy hit: sovereign debt metrics are not that complex and to be frank there is less pressure from governments on the teams that will make the decisions than there was from Wall Street.
This is, essentially, about the markets making judgements about politics and the agencies trying their best to embody that in an objective manner.
Right now the option of just doing a Japan and accepting a lower credit rating is treated as equivalent to suggesting we leave the UN Security Council and abandon the nuclear deterrent.
But when people understand the scale of the spending cuts that an incoming government will have to make to maintain AAA, it may not be so unthinkable after all.
Watch Newsnight tonight as I meet the men who have the power to slash Britain's credit score and provoke political chaos. BBC Two - 2230 GMT, then afterwards on the BBC iPlayer or Newsnight website.