A timely announcement reminding all of the long-term cost of these packages. The money has to be paid back through taxes sometime in the future.
On Friday, the credit rating agency Fitch downgraded the UK’s sovereign credit rating one notch, citing worries about the economy and a jump in government debt. Bond investors at least are shrugging this off. But the announcement has revived long-standing concerns about the role of rating agencies during crises, and whether they actually make things worse. Here’s my take.
It is important to understand first that, despite some hyperbolic headlines, Fitch’s announcement is unlikely to have any significant impact on the UK’s cost of borrowing. There is nothing surprising in the agency’s statement that might tell investors anything new about the prospects for the UK economy or public finances. What’s more, the UK’s revised rating is still comfortably within the most valued category of ‘investment grade’.
Nor is the UK being singled out. It is highly likely that other countries will be downgraded further too, continuing a trend in…
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Utopia, you are standing in it! 
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