UK Rating To Be Reviewed After Economic Struggles reports Debt Management Plans

(EstateNewsWire.com, November 21, 2012 ) London, U.K -- According to Moody’s Investors Service, the UK’s top Aaa rating will be reviewed at the start of 2013 as the national economy struggles while the government tries to decrease deficits and Europe’s overall debt crisis.

Moody’s reports that the UK is going to see a slower recovery of the economy than previously expected. This is thanks to private as well as public sectors trying to decrease their debt.

According to Sarah Carlson, a Moody analyst, the findings are in direct correlation with the government’s attempts to gain fiscal consolidation and reduce debt. Carlson says that these plans are being hurt by “weaker than expected economic prospects.”

Many experts say that the economic recovery will be a tedious journey, and with the economy expected to drop by 0.3% this year, they have a point. On the other hand, the economy is expected to rise by over 1% next year, which means that while the progress is slow, it is there.

The Labor Party has said they want spending cuts to be slowed in order to protect economic growth, which could be significantly damaged if giant cuts are made quickly. While the UK has a strong history of reversing debt, experts say that this time it is different thanks to the political cycle combined with more difficult macroeconomic conditions.

Many people, including Bank of England Governor Mervyn King, expressed the feeling that companies like Moody should be taken at face value and not necessarily believed 100%. According to the numbers, nearly 50% of the time ratings like Moody’s project a rise in the economy, it falls, and vice versa, so nobody should be panicking based on the projections by the Investors Service.

Moody also announced that if Congress does not decrease the percentage of debt-to-gross-domestic-product before next year, the company will have no choice but to downgrade the United States of America from an Aaa rating to an Aa1 rating.

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