More Balls From Balls

Rather than listen to the spin, why not read Moody’s statement in full here.

The killer central argument is this:

“The primary driver underlying Moody's decision to change the outlook on the UK's Aaa rating to negative is the weaker macroeconomic environment, which will challenge the government's efforts to place its debt burden on a downward trajectory over the coming years. These challenges, reflecting the combined effect of a commodity price driven hit to real incomes, the confidence shock from the euro area and a reassessment of the lasting effects of the financial crisis on potential output, were already evident in the government's Autumn Statement…. The second and interrelated driver of Moody's decision to change the UK's rating outlook to negative is the fact that the weaker environment is also, in part, a by-product of the ongoing crisis in the euro area. Although the UK is outside the euro area, the crisis is affecting the UK through three channels: trade, the financial sector and consumer and investor confidence.”

So, how’s that economic policy working out for you, Mr Balls?