Fitch Downgrades UK

Last week Fitch downgraded the UK to AA+ owing to a weakened economic outlook.

This follows on from Moody's downgrade in February. The BBC quote Fitch as saying that the downgrade:

"Primarily reflects a weaker economic and fiscal outlook".

However, it has placed the UK's outlook as being "stable"; ie it does not expect to downgrade the UK again in the foreseeable future.

As to whether austerity is the corset means of bringing about growth, only time will tell.

Ooh La La Moody's Downgrades France

Moody's has downgraded France from AAA to Aa1.

Moody's rationale for the downgrade being that France’s long-term economic growth has been hit by its inflexible labour market and low levels of innovation eroding its competitiveness and industrial base.

It also cited France's exposure to the ongoing Eurozone crisis.

Moody’s is quoted by the Telegraph:

“Further shocks to sovereign and bank credit markets would further undermine financial and economic stability in France as well as in other euro area countries. 

The impact of such shocks would be expected to be felt disproportionately by more highly indebted governments such as France.”

Moody's Cuts EU's Rating

Moody's has cut its outlook on the triple A rating of the European Union to negative.

The cut reflects the credit risks of the EU's key budget contributors.

Moody's is quoted by the Telegraph:

"The outlook change to negative reflects the negative outlooks now assigned to the Aaa sovereign ratings of key contributors to the EU budget: Germany, France, the UK and the Netherlands, which together account for around 45pc of the EU's budget revenue. 

Moody's believes that it is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states."

Greece Devolves To Emerging Economy

Reuters reports that Greece is now devolving from a first world economy into an emerging economy.

MSCI has placed Greece on review for relegation to emerging market status, this will make it the first country to be thrown back out of developed equity indices.

French Downgrade Rumours

The Twittersphere is awash with rumours that France is to be downgraded.

Sacrebleu!