Fraser Nelson is wrong on Britain’s AAA rating

Fraser Nelson claimed that the possibility of a Tory Government is all that is preventing the UK losing its AAA credit rating. An FT interview proves him wrong.

Yesterday The Spectator’s Fraser Nelson claimed that the possibility of a Tory Government is all that is preventing the UK losing its AAA credit rating:

“Fitch Ratings has today said that Britain’s AAA debt rating is more at risk than that of any other major nation because it needs “the largest budget adjustment…

“But then Fitch says, more or less, that it’s banking on George Osborne’s first budget to sort the mess out.”

He further noted that the Conservatives:

“have been talking to the debt rating agencies (Fitch, S&P etc) and given them informal indications of how much they would cut the deficit by. I suspect that these agencies have been given more detail than the public has”

Brian Coulton, the head of European ratings at Fitch, has given an interview to the FT:

“Q: Is the expectation of a Conservative victory at the general election a significant factor in calculating the UK’s sovereign credit rating?

We are obviously aware that there will be an election next year but our capacity to forecast the election outcome would not be a sufficient basis to maintain a ‘AAA’ rating. We believe that fiscal policy objectives will be reorientated over the course of 2010 regardless of which government is in power …

“Q: Have either Labour or the Conservatives given Fitch analysts more information about their post-election spending plans than is available to the public?


Nelson looks to be wrong on both counts.

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14 Responses to “Fraser Nelson is wrong on Britain’s AAA rating”

  1. Guido Fawkes

    Hang on there, did you really expect Coulton to say “yes we’re banking on a Tory win”?

    He is saying that he expects “fiscal policy objectives will be reorientated over the course of 2010”. Hmm, which party is promising that? Hint, it is not a party led by someone called Gordon.

  2. duncanweldon


    Coulton says:

    “We detect a growing cross party consensus that fiscal adjustment needs to happen.”

  3. Paul

    What Fraser Nelson omits to mention is that Fitch’s gives the UK a ‘stable’ outlook, whereas S&P gave it a negative one on 21st May. Ergo, things are seen as improving under the current administration. I loved the FT view on this ratings ‘news’, pointed out to me by Tom Freeman when I picked up the story at Though Cowards Flinch:

    ‘After a kneejerk sell-off, the pound recovered some poise as traders realised that the remarks contained little new information.’

  4. Giles

    He is saying that he expects “fiscal policy objectives will be reorientated over the course of 2010″.

    They choose their words carefully. Objectives, not “cut immediately”. Hopefully, if we are recovering, the next objective for fiscal policy ought to be gradually, sustainably and realistically dealing with the deficit, getting it down to 4% by 2019 would be pretty good, by which time debt might be 100% (public) and households pretty secure again. Then we can consolidate over the next decade.

    Cutting immediately might well lead to more recession, more debt, higher deficits, the worst of all worlds. I am hoping that Osborne will work this out within a year. That spreadsheet in Slash and Grow may help?

    As a swing voter, and someone who thinks highly of Lord Lawson in some regards, I find the contrast between the abilities of THAT former editor of the Spectator, and the current one, disturbing, and emblematic of the general crisis we may find ourselves in when similarly naive and economically untrained people take over the Treasury next year.

  5. Giles

    I would add that while, politically, I would love a hung parliament next year, the sight of Congress fighting over Bills does not fill me with confidence about what will happen to gilt yields if it happened. Undivided power is generally tyrannical, but it has helped the UK deal with 4 fiscal crises in 40 years (1969, 1977, 1980s, 1990s)

  6. Claire Spencer

    I try to be a good person. But I am always delighted when Fraser Nelson is wrong: #schadenfreude (@leftfootfwd)

  7. Paul Sagar

    There’s so much stupidity and madness in Guido’s comment one has to assume it’s a joke. After all, isn’t Fawkes supposed to be anti-politics? Why is he popping up defending the Tories time and again? No, it must be an imposter…

    Giles, how can you be a floating voter? I thought you were indentured to the Liberal Democrats?

  8. Liberal Conspiracy » Which planet do Spectator writers inhabit?

    […] is called ‘Two Elementary Mistakes’. That’s a heap of regurgitated crap too, as Duncan shows, but at least the headline’s […]

  9. Giles

    I only joined the party a couple of years ago. Voted every way in the past. Politics can’t work without us non-tribal types, who change their minds after the age of 18 a few times.

    I can’t quite believe how much like the Twat-o-Tron the comments at the bottom of Spectator blogs are.

  10. The questions that George Osborne must answer | Left Foot Forward

    […] day, Bloomberg reported that the UK was “unlikely” to lose its top credit rating. And scotching suggestions that a looming Conservative victory was the only thing maintaining the AAA rating, last week Brian […]

  11. Alex Ross

    Fraser Nelson caught telling porkies over the Tories saving UK's AAA rating: #torylies

  12. Ray Bates

    Fraser Nelson is wrong on Britain's AAA rating

  13. Curly Snide Jr

    Fraser Nelson is wrong on Britain's AAA rating

  14. Ernest Blythe

    Fraser Nelson is wrong on Britain's AAA rating

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