Moody’s Investors Service said its top debt ratings on the US and the UK could “test the AAA boundaries” because their public finances were worsening in the wake of the global financial crisis.
The UK and US had “resilient” AAA ratings, as opposed to the “resistant” top ratings on Canada, Germany and France, Moody’s said in a report yesterday. None of the top-rated countries were “vulnerable,” or had public finances that were “stretched beyond the point of ‘no return’ to the AAA category,” the report said.
The pound fell against all 16 most-traded currencies, dropping as much as 0.4 percent to £1.6381 versus the dollar. Public finances in “resilient” AAA-rated countries are “deteriorating considerably and may therefore test the AAA boundaries,” Moody’s said.
All AAA-rated governments were affected by the global financial crisis, with differences in their impact and ability to respond, Moody’s analysts led by Pierre Cailleteau said in the report. “Resistant” countries, which also include New Zealand and Switzerland, started from a more robust position and won’t see debt exceed levels consistent with their AAA status, Moody’s said.
British Chancellor of the Exchequer Alistair Darling said on Monday that he would rather suffer criticism for removing support for the economy too late than too early. The remarks suggested he will put off measures to reduce the UK’s biggest budget deficit since World War II.
The UK entered the crisis in a vulnerable position and is now facing an “inexorable deterioration of debt affordability,” Moody’s said.
The UK’s public debt will swell to 89.3 percent of the economy next year from 75.3 percent this year, the Organization for Economic Cooperation and Development (OECD) said.
The US’s debt burden will climb to 97.5 percent of GDP next year from 87.4 percent, the OECD forecast in June.
The Ministry of the Interior (MOI) is to tighten rules for candidates running for public office, requiring them to declare that they do not hold a Chinese household registration or passport, and that they possess no other foreign citizenship. The requirement was set out in a draft amendment to the Enforcement Rules of the Public Officials Election and Recall Act (公職人員選舉罷免法 ) released by the ministry on Thursday. Under the proposal, candidates would need to make the declaration when submitting their registration forms, which would be published in the official election bulletin. The move follows the removal of several elected officials who were
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