What's this all about then?
Is it true [bold]?
IMF's Lagarde warns of return to Great Depression | Business | guardian.co.uk
Is it true [bold]?
Bank of France governor Christian Noyer: the UK had a bigger deficit than France and deserved to lose its triple A status first. Photograph: Roslan Rahman/EPA
3.10pm: The claim from French central bank governor Christian Noyer that Britain should lose its AAA credit rating before France is dominating the headlines today.
Officially, the UK government is being quite restrained. Here's the response from David Cameron's official spokesman:
We have put in place a credible plan for dealing with our deficit and the credibility of that plan can be seen in what has happened to bond yields in this country.
Looking at the Reuters terminal, UK ten-year government bonds are trading at a yield (effectively the interest rate) of 2.119%. France's 10-year bonds are changing hands for around 3.07%. That implies that the French government would have to agree to significantly higher repayments when selling its debt.
3.10pm: The claim from French central bank governor Christian Noyer that Britain should lose its AAA credit rating before France is dominating the headlines today.
Officially, the UK government is being quite restrained. Here's the response from David Cameron's official spokesman:
We have put in place a credible plan for dealing with our deficit and the credibility of that plan can be seen in what has happened to bond yields in this country.
Looking at the Reuters terminal, UK ten-year government bonds are trading at a yield (effectively the interest rate) of 2.119%. France's 10-year bonds are changing hands for around 3.07%. That implies that the French government would have to agree to significantly higher repayments when selling its debt.
Amid speculation that Standard & Poor's is gearing up for a downgrade of France's top credit rating, the head of the Bank of France Christian Noyer said today there is no justification for that. Controversially, he suggested that Britain's AAA rating should be downgraded first.
In an interview with local newspaper Le Telegramme de Brest, Noyer, a member of the ECB's governing council, also questioned whether the use of ratings agencies to guide investors was still valid.
In the arguments they [ratings agencies] present, there are more political arguments than economic ones.
The downgrade does not appear to me to be justified when considering economic fundamentals. Otherwise, they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping.
Noyer was also unhappy about critical comments from ratings agencies following last week's EU summit in Brussels. He said such comments had weakened positive sentiment in the markets following the agreement to draft a new treaty for deeper integration in the euro zone.
Frankly, the agencies have become incomprehensible and irrational. They threaten even when states have taken strong and positive decisions. One could think that the use of agencies to guide investors is no longer valid.
In an interview with local newspaper Le Telegramme de Brest, Noyer, a member of the ECB's governing council, also questioned whether the use of ratings agencies to guide investors was still valid.
In the arguments they [ratings agencies] present, there are more political arguments than economic ones.
The downgrade does not appear to me to be justified when considering economic fundamentals. Otherwise, they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping.
Noyer was also unhappy about critical comments from ratings agencies following last week's EU summit in Brussels. He said such comments had weakened positive sentiment in the markets following the agreement to draft a new treaty for deeper integration in the euro zone.
Frankly, the agencies have become incomprehensible and irrational. They threaten even when states have taken strong and positive decisions. One could think that the use of agencies to guide investors is no longer valid.
IMF's Lagarde warns of return to Great Depression | Business | guardian.co.uk
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