Uk credit rating

[Rjk]

Just read that the downgrading of our credit rating will mean we pay an extra 0.5 % on the nation's debt - which results in is paying out more than 22bn a year extra - twice as much as the EU was costing us.
Not sure If accurate, does that seem right?

[severncity]

Where did you read this information?

Gilt yields have fallen since Friday, meaning that it is cheaper for the UK government to borrow.

http://www.ft.com/cms/s/0/6286ad2a-3...#axzz4CsZkXZp0

From the FT link:

"British government borrowing costs fell below 1 per cent for the first time in history on Monday as the aftershock of last week’s decision to exit the EU spurred investors towards gilts.

"In spite of warnings that the UK faces a credit rating downgrade as the result of the referendum, gilts have retained their status as a haven from market turmoil, helping the bonds to trade at record-low interest rates."

[Rjk]

Yeah it seems dubious to me, a politician tweeted it earlier but not sure it's correct.

[az city]

Two partially countervailing effects are at work. Investors are heading for govt. bonds for their security (cf. the rise in gold) which means their price is rising causing their yield to fall (the interest rate). OTOH downgrading means they are considered potentially less secure. At the moment I think the first effect dominates while large holdings of sterling await an exchange rate recovery. In the LR the latter will dominate.

[Des Parrot]

Yeah it seems dubious to me, a politician tweeted it earlier but not sure it's correct.

.

[blue matt]

Yeah it seems dubious to me, a politician tweeted it earlier but not sure it's correct.

Why stop that in another Brexit was wrong thread eh ? ??

[Rjk]

Why stop that in another Brexit was wrong thread eh ? ??

Didn't seem right to me so I thought I'd check. Now seems even less so.

[blue matt]

Didn't seem right to me so I thought I'd check. Now seems even less so.

to your defence you did put " Not sure If accurate, does that seem right? "

[Barry Dragon]

Two partially countervailing effects are at work. Investors are heading for govt. bonds for their security (cf. the rise in gold) which means their price is rising causing their yield to fall (the interest rate). OTOH downgrading means they are considered potentially less secure. At the moment I think the first effect dominates while large holdings of sterling await an exchange rate recovery. In the LR the latter will dominate.

So checking the rates, they have fallen about 0.5%. So to go back to the OP. That means we have saved £22bn. Wow leaving the EU was a good decision.

In reality as az city has put, there are too much volatility to actually say where it will settle, could be up or down.

Which MP? I want to tweet him back?

[az city]

So checking the rates, they have fallen about 0.5%. So to go back to the OP. That means we have saved £22bn. Wow leaving the EU was a good decision.

In reality as az city has put, there are too much volatility to actually say where it will settle, could be up or down.

Which MP? I want to tweet him back?

Barry,

Not so fast. It's a lot more complicated. Yields are falling but that does not mean the coupon is affected on an existing bond. If the coupon on new gilts falls as the demand for them in auctions is high only then does the issuer (UK) benefit.

[Wales-Bales]

Just read that the downgrading of our credit rating will mean we pay an extra 0.5 % on the nation's debt - which results in is paying out more than 22bn a year extra - twice as much as the EU was costing us.
Not sure If accurate, does that seem right?

Are these the same rating agencies that gave sub-prime junk bonds a AAA+++ rating?

[az city]

Are these the same rating agencies that gave sub-prime junk bonds a AAA+++ rating?

Kinda. There's no such rating I'm aware of.

[Wales-Bales]

Kinda. There's no such rating I'm aware of.

OK let's just call it the super-duper rating. And we can call our new downgraded status the naughty-boy rating. It makes things easier all around

[blue matt]

OK let's just call it the super-duper rating. And we can call our new downgraded status the naughty-boy rating. It makes things easier all around

its ok, i heard that the government have started a petition to have it moved back to " super-duper "