Don't Bet on a UK Debt Downgrade: Fitch says
The UK does not face the same risk of sovereign debt default as Greece because it doesn't have the same structural problems and has benefited from the falling value of the pound, Andrew Colquhoun, director, sovereign group at Fitch Ratings Agency, told CNBC Friday. "The UK has a very wealthy, diverse economy. I'm not sure the structural problems in the UK are anywhere near as severe as they are in Greece," Colquhoun said. "The UK is AAA. We have said that the chances of that changing are less than 50 percent and therefore the UK remains AAA with a stable outlook," he added Greece's credit rating was cut in various stages over 2009 by Fitch to BBB+. The rating is relatively low for a euro zone country, but still quite high on a global scale, Colquhoun said. One of the reasons that Greece has struggled to get its public deficit under control is the relative strength of the euro, according to Colquhoun. Meanwhile, the pound has seen its value fall sharply against the euro and other currencies during 2009, which has supported the UK's growth outlook, he said. European stocks declined sharply this week as investors fretted about the outlook for sovereign debt in Greece, Portugal and other euro zone countries. Meanwhile, bonds issued by the likes of Greece have been hammered in the markets, making it more expensive for governments to raise funds and leading to fears of default. The sudden market moves have taken some investors by surprise given that the euro zone's debt problems have been known for some time. But Anantha Nageswaran, chief investment officer at Bank Julius Baer, thinks investors have been "ignoring the problem until it stares them in the face." Spain could be the next country to have its debt rating downgraded and could see a cut within the next eighteen months, José Manuel Amor from Analistas Financieros Internacionales told CNBC Published: Friday, 5 Feb 2010 via CNBC http://www.cnbc.com/id/35253200/site/14081545 source: http://bigcapital.wordpress.com/
