Chinese Rating Agency Downgrades UK Sovereign Debt; Downgrade Party Needed

"The Wall Street Journal, the Telegraph, and International Business Times have stories regarding a downgrade of UK sovereign debt by a Chinese rating company. Much of the information overlaps, but some snips vary site-by-site.

Wall Street Journal: China Ratings Agency Downgrades UK Sovereign Credit Ratings

Chinese ratings provider Dagong Global Credit Rating Co. said Tuesday it downgraded the local and foreign currency sovereign credit rating of the U.K. from AA- to A+ with a negative outlook.

"The downgrade reflects the true status of the deteriorating debt repayment capability of the U.K. and the difficulty in improving its sovereign credit level in a moderately long term in the future," Dagong said in a statement.

"Considering that the uncertainty arising from (future) monetary policy adjustments of the Bank of England and the spillover effect of the European countries...are likely to further worsen the government's fiscal status, Dagong gives the negative outlook on the local and foreign currency sovereign credit rating of the U.K. (for the next) one to two years," Dagong said.

Dagong said the data indicate a deterioration in the U.K.'s ability to service its debt, while global inflation triggered by excessive issuance of the U.S. dollar will also affect growth..."

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