THE GUARDIAN: Lab-Lib government the least liked option by markets and would almost guarantee a downgrade of UK debt – BNP Paribas
Britain would most likely suffer an expensive and potentially damaging downgrade to its debt rating if the Liberal Democrats form a coalition with Labour, City analysts warned today amid ongoing uncertainty about the creation of a new government.
As the Institute of Directors called on political parties to focus on the economy rather than the need for electoral reform, analysts at BNP Paribas reckoned that a "Lab-Lib government is the least liked option by markets and would almost guarantee a downgrade of the UK sovereign [debt]".
The top-notch AAA debt rating that the UK currently holds ensures that the country achieves the most competitive rates when raising money on the financial markets. If the rating is cut then the country would be forced to pay more to borrow money - although it has a long way to fall before reaching the junk status assigned to Greece, the recipient of a €110bn (£94bn) bailout package from the International Monetary Fund and eurozone countries. >>> Jill Treanor | Tuesday, May 11, 2010
