'UK loses top AAA credit rating for first time since 1978'

Speaker Bercow gave Labour permission to bring an 'Urgent Question' to the House today re the UK loosing the AAA status.

What an own goal. They should have waited to see what the markets did today before giving Osborne the chance to trounce them, trounce them he did.

Yes, but what evidence is there that if you put three economists together you get three opinions? It is like the phrase 'Lies, damned lies and statistics'. If you examine the statistics understand them properly you can see where the bias, if any lies and once you know the limitations you can interprete them successfully. What doesnt work is someone who doesnt understand figures or how to collect them cobbling together some survey and proclaiming the results as facts.

There is a famous story of a poll before, I think the 1948 US presidential election. A major newspaper did a telephone survey of electors and came out with huge banner headlines that the republicans were going to sweep the board in the election. In fact it was a democratic landslide . The paper had failed to factor in that the proportion of the population with phones was not that large and disproportionately owned by the well-off and older households that were more likely to be republicans.

The pound at 1.14 is still a big drop from a couple of months ago! OH has been doing the spreadsheet today to see how our budget will be affected. We build in a variable exchange rate and know very well that it is our own choice to live here, but always a bit of a bummer!
Average for last year was about 1.23, I gather.

Well so far today the markets are not shaken, nor stirred.

As of lunch time Germany, UK, France and the USA are all up in the Bond Yields, not much between them. The FTSE shows to be doing equally as well across the board. The pound against the Euro was £1.14p.

Fingers crossed things do not change as the day progresses.

Who are these agencies anyway to set themselves up as experts? Must be full of economists and from watching interviews with these "experts" I agree with the joke "Put 3 economists together and you'll get 4 different opinions".

flick 'don't vote for any of them, it only encourages them' One will cut back on everything to save money and the other will spend prolifically to try to get out of the mire. I don't think either of them really has the answer and neither do I

I used to believe that Vince Cable knew what he was talking about in terms of the economy - after all he did warn about the likelihood of the banking crisis - but they went and made Osborne chancellor and the rest is very unfortunate history. IMHO

Eventually, possibly, but not with the current shadow cabinet, IMO.

I confess, I am an economist, but the advice I would give is not specific to economists, it is if you find yourself in a hole, stop digging.

We need some balance between reducing expenditure and encouraging growth and we desperately need a government that thinks through its initiatives before it launches them. The pasty tax, the tax on static caravans that threatened to close down a large and successful exporting industry in an area of high unemployment. A government that dances on a head of a pin to produce the latest policy that they say will mean we will not need to sell our houses if we need care, but does nothing of the sort, meanwhile the policy of quantative easing continues driving down the value of annuities so that older people are less and less able to fund the care they need as they grow older.

We need a government with a coherent, thought through economic policy, rather than one driven by an obsession with the latest poll ratings and what is being posted on twitter.

I used to consider that the Labour party was well meaning but incompetent and the Conservatives, unpleasant but efficient. Currently we have a Conservative party which is unpleasant and incompetent. Does that mean there is a chance the Labour party may become efficient?

Well I'm up to Norway and Iceland in June, are they in the EEC?

Yes, it is mostly tax but the recent increases are not due to that, mainly the fact that the £ has plummetted not only against the $ but also the €. DS2 is happy as he lives in Holland and has just been shopping in New York!

Wouldn't know. I drive my car so seldom, less than a thousand a year, I haven't bought any diesel for about 6/12
I think the petrol increases are mostly tax. I heard on the wireless today that 62% of the price is tax!

Do you mean me Galen It wasn't intended to imply I did. Just responding to the comment about the £ plummetting. Has petrol not gone up in Bristol too?

I don't call where you live abroad?

granjura I think it already has! We have seen it so far at the petrol pumps so it is bound to affect lots of other things too.

Tougher times ahead for those of us who have retired abroad on UK pensions- as the £ is likely to plummet.

anno when did not being an expert on a subject ever stop any of us?

Flickety, it's very useful having someone on this thread who knows about economics. Though I find the politics of the whole thing interesting and often frustrating, I have trouble finding my way thorough the mazes of the economy.

Osborne seems determined to go with the second of your options, FlicketyB!

What do you think the Government should do Flickety?
Not being sarcastic, I remember seeing on one of the threads somewhere that you are an economist.

The economy is affected by government policies. Moody's think government policies are making the rate of recovery slower than is necessary. This puts us at a disadvantage compared with other countries and as the economy is not growing we will need to borrow more money than originally planned, which will increase our debt burden, that or cut government expenditure back even more than it has been at present present. It has been suggested that further cuts of between 25% and 33% will be necessary to meet current deficit reduction plans.

POGS re: your last para. yes, don't we all

Movedalot

I find myself in agreement with you, all the way. Very similar to what I would have written.

The AAA rating has been 'on watch' for a while and as such has been taken into account by the markets, albeit thus far. Next week we will see what impact it will have on us. Have they not agreed that the policies the government are taking are not the whole issue. It is the influence of the EU which is in recession and the difficult worldwide trading conditions that are shaping our economy, much the same as all other countries.

I do find Balls amusing when he says Osborne has lost credability by the UK lossing the AAA rating. Then he went on to say 'he told us all' that the likes of Moodys and S&P are rubbish at making any judgements.

I am not by any means saying the government cannot be doing more. There is always more to do. I just wish I could hear policies, not political spin by them all.

I disagree Flick. Moodys have based this on what they think of the economy, not the policies. That does not mean they disagree with Osborne, it just means we are not doing as well as we were which may, or may not, be down to current policies. I don't think they make a right or wrong judgement.

if those that set the rates thought Osborne's policies were the best they could be in present circumstances they wouldn't have reduced the rating.

This doesn't mean everything he is doing is wrong, no government is ever all wrong or all right, but does mean he needs to be less blinkered and intractable and more open to new ideas and consider the possibility that he is not infallable. Nobody is perfect.