But you forget to mention that the credit rating agencies have come to this conclusion because they have been reassured by talk from all parties that cuts in government spending are coming. Which is highlighted in the article:

“The U.K. and the U.S. are showing signs of recovery,” the Moody’s report said. “However, to retain their ‘resilient’ status, the U.K. and U.S. will need to severely adjust their fiscal policies, even in the unlikely event of a vigorous rebound in their economies.”

So your premise is in fact wrong.

Sorry missed some of my intended quote:

“We assume that the adjustment to the U.K.’s public finances that is likely to take place in the context of the forthcoming elections, probably through cuts in spending, will keep the debt trajectory within Aaa boundaries,” the Moody’s report said. “Broad acceptance among the public of the inevitability of cuts in government expenditure and tax increases suggests such consolidation is at least possible.”

No, the premise is not wrong. Chris’s (and my) premise is that Hammond said that two credit rating agencies reckon the UK may lose its triple A status, but that this is not true.

Of the big three – S&P, Moody’s and Finches, Moody’s have said what they said (see above) and Finch’s have agreed:

‘This was echoed by Brain Coulton from Fitch ratings. He said the UK benefits from strong demand for its bonds, and its reserve currency status, which means it has ‘exceptional financing flexibility’.

And he points out UK debt was relatively low ahead of the crisis and is not likely to exceed debt of other large ‘AAA’ sovereigns – which are also experiencing large fiscal shocks.

See http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=356611

The shadow chancellor, Tory MP Phill Hammond
The who?

Hammond is not the shadow Chancellor but shadow Secretary to the Treasury – George Osborn is the shadow Chancellor.

Even so, Hammond’s commentary on the economy is regularly unreliable. He often attributes the financial crisis and ensuing recession to Gordon Brown. Now, I don’t regard Gordon Brown as entirely innocent of blame but Hammond’s tendentious take does overlook the American experience and the global reach of the recession. The economies of several countries – like Germany and Japan – have taken bigger knocks in terms of lost GDP than the UK economy.

Mull on this from Alan Greenspan last year:

“almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“‘Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,’ he told the House Committee on Oversight and Government Reform.”
http://www.nytimes.com/2008/10/24/business/economy/24panel.html

Well spotted Tony@4. It was a sort of joke that started at source (Though Cowards Flinch) around Hammond being the ‘wanabee’ chancellor cos Osborne’s so bad at economics.

Chris maty want to edit it if he thinks he overlooked it, or just stay with the joke if that’s where he was.

Not a great joke, I accept.

“Two of the credit rating agencies have already warned us”

Well I know S&P have warned us in the recent past. Have either of the other two agencies also done so in the recent past? If so, then he wasn’t incorrect at the time and this is a bit of a ‘man can’t tell future’ non-story. If not, then he’s exaggerating the warnings given, although his point about needing to be focused on bringing debt down is still correct.

I see the post has already been edited to reflect the correct title. Cheers for pointing that out.

If not, then he’s exaggerating the warnings given, although his point about needing

He isn’t exaggerating – he’s bullshitting. I doubt any of the media will pick up on it though. They’re too busy lapping up the Tories.

Hammond and the rest of the shadow Treasury team are well advised to read Martin Wolf in Wednesday’s FT although I do appreciate they might find the experience stressful:

Why it is still too early to start withdrawing stimulus
http://www.ft.com/cms/s/0/cf6ae1e4-9ca5-11de-ab58-00144feabdc0.html?nclick_check=1

I do so wish the shadow Treasury team could get themselves some better economic advice.

Btw Larry Summers, former US Treasury Secretary in the Clinton administration and currently Director of the US National Economic Council in the Whitehouse describes Martin Wolf as “the world’s preeminent financial journalist”. The title of Wolf’s recently published book on the financial crisis is: Fixing Global Finance (Yale UP, 2009)

I misread Hammond has Hannan.

I feel a little bit cheated…

[8] Sunny

“He isn’t exaggerating – he’s bullshitting”

No, bullshitting is what Brown does when he says Labour have saved 500,000 jobs.