Cameron Evokes Black Wednesday as Pound Weakens 7%: U.K. Credit
By Gonzalo Vina & Lucy Meakin
When Cameron and Osborne took office in May 2010, they predicted the economy would grow more than 5 percent over the next two years, a budget deficit equal to 11 percent of gross domestic product would fall to 2 percent by April 2015 and the U.K. would keep its top credit rating. Instead, output rose 1.1 percent, the deficit is still 8 percent of GDP and analysts say Fitch Ratings and Standard & Poor’s will follow Moody’s in downgrading Britain’s credit score after today’s budget.
Credit-default swaps insuring gilts rose 69 percent from a more than four-year low of 26 basis points on Nov. 1, the most among 67 governments tracked by Bloomberg. The premium investors demand to hold gilts rather than German bunds has increased fivefold since August to 52 basis points.
Comment: Too bad Cameron can't blame the euro for Britain's malaise.