Standard & Poor's cuts U.K. outlook to negative from stable

This is what happens when you debase your currency,is U.S. next?-Lou


Standard & Poor's cuts U.K. outlook to negative from stable

LONDON (MarketWatch) -- Standard & Poor's on Thursday lowered its credit outlook on the U.K. to negative from stable in view of the country's swelling debt, which may expand even as the economy recovers.
The move by Standard & Poor's raises the prospect not only of a credit-rating downgrade in Britain but a lowering of the outlook in the U.S., which has taken a similar path of big spending and quantitative easing to escape the credit-led recession.

"I think there will be a downgrade on the U.K. and I think there will be a downgrade on the U.S. outlook from one of the Big Three" credit-rating firms, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange.

The British pound sputtered after the report, sliding as much as 1% after the news, though the currency is still trading near the highs of the year.
The FTSE 100 stock-market index weakened after the report, sliding 2.1%.

Yields on 10-year British government bonds, known as gilts, rose 4 basis points to 3.62%. Yields move in the opposite direction to prices.

S&P kept the country's AAA rating intact, but the outlook signals that the country's credit rating could be lowered within the next two years.

S&P already has lowered the ratings of other European countries, including those of Spain, Ireland, Greece and Portugal. The Daily Telegraph newspaper had reported in April that S&P was mulling its position on the U.K.

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