Rating agency says deficit reduction plan passed by Congress does not got far enough to stabilise country's debt crisis
Larry Elliott, Jill Treanor and Dominic Rushe
guardian.co.uk, Friday 5 August 2011
"The United States lost its AAA credit rating late on Friday night, ending another wild day on the world stock markets and prompting fears that next week could be equally as calamitous.
Rating agency Standard & Poor's decision to cut the US debt rating could have dire consequences, increasing the cost of borrowing for the US and setting off more panic selling when stock markets open again on Monday.
S&P had held back cutting the rating earlier in the day, after the US government reportedly questioned its maths. But the agency insisted it was cutting America's top AAA rating by one notch to AA-plus, saying the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilise its debt situation.
This is the first time that S&P has issued a "negative" outlook on the US government since it began rating the credit-worthiness of railroad bonds in 1860.
The dramatic reversal of fortune for the world's largest economy means that US treasuries, once seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany or France....."
Larry Elliott, Jill Treanor and Dominic Rushe
guardian.co.uk, Friday 5 August 2011
"The United States lost its AAA credit rating late on Friday night, ending another wild day on the world stock markets and prompting fears that next week could be equally as calamitous.
Rating agency Standard & Poor's decision to cut the US debt rating could have dire consequences, increasing the cost of borrowing for the US and setting off more panic selling when stock markets open again on Monday.
S&P had held back cutting the rating earlier in the day, after the US government reportedly questioned its maths. But the agency insisted it was cutting America's top AAA rating by one notch to AA-plus, saying the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilise its debt situation.
This is the first time that S&P has issued a "negative" outlook on the US government since it began rating the credit-worthiness of railroad bonds in 1860.
The dramatic reversal of fortune for the world's largest economy means that US treasuries, once seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany or France....."
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