[Toy Soldier]

... Companies, "but it's just a coincidence!" Says TiBB

The UK has been stripped of its last AAA rating as credit agency Standard & Poor’s warned of the economic, fiscal and constitutional risks the country now faces as a result of the EU referendum result.

The two-notch downgrade came with a warning that S&P could slash its rating again. It described the result of the vote as “a seminal event” that would “lead to a less predictable stable and effective policy framework in the UK”.

The agency added that the vote to remain in Scotland and Northern Ireland “creates wider constitutional issues for the country as a whole”.


S&P was the last of the big three ratings agencies to have a blue-chip rating on the UK’s credit-worthiness. Moody’s, which stripped the UK of its top notch rating amid the austerity cuts of 2013, said last week it might further cut its view of the UK.

Rating agency moves have the potential to make it more expensive for the government to borrow.

The S&P move came after another torrid day on the financial markets. The pound hit fresh 31-year lows and £40bn was wiped off the value of the UK’s biggest companies on Monday, despite efforts by George Osborne to quell investors’ concerns about the economic and political ramifications of the Brexit vote.

After three days of silence,*the chancellor*made a statement on Monday morning to try to calm the markets. However, sterling remained under sustained pressure on the foreign exchange markets as economists slashed their forecasts for UK economic growth. Wall Street was also weaker while continental bourses sold off sharply*after Friday’s record $2tn of losses on global stock markets.

Expectations are mounting that the Bank of England will cut interest rates – possibly to zero from their historic low 0.5% – to stimulate the economy, and yields on government bonds fell below 1% for the first time, which could spell cheaper mortgage rates.

In a live broadcast just after 7am, as dealers in London braced for another day of turmoil, Osborne insisted: “Our economy is about as strong as it could be to confront the challenge our country now faces.”

But moderate losses on the FTSE 100quickly deepened and at one point sterling was down 3.5% against the dollar, at $1.3122, its lowest level since 1985. Against the euro, the pound was down 2.4% at €1.19.

Speaking at the World Economic Forum in China, Nouriel Roubini, economist at New York University, described Brexit as “a major significant financial shock” that would create “a whole bunch of economic, financial, political and also geopolitical uncertainties”.

By the end of trading, the FTSE 100 index was down 2.6%, or 156.5 points, and below 6,000. The FTSE 250, the next tier of companies and more closely tied to the UK economy, was down 7%, coming on top of a 7% fall on Friday.

“It’s been another dramatic day of trading on the UK stock market,” said Laith Khalaf, senior analyst at the financial firm Hargreaves Lansdown.

Companies likely to be impacted by a Brexit-induced recession were hit hard. In two days, about £40bn has been wiped off the value of banking stocks and £8bn off housebuilders. At one point, shares in the bailed-out Royal Bank of Scotland plunged 25%, while housebuilders such as Persimmon and Taylor Wimpey have lost more than 40% in just two trading days.

Michael Hewson, chief market analyst at CMC Markets, said while Osborne’s statement had been measured his comments “were unable to prevent the feeling that UK politics remains in a state of paralysis, with no clear contingencies in place to deal with the fallout of a leave vote”.

The biggest faller in the FTSE 100 was short-haul airline easyjet, which plunged by 22%*after warning that wary consumers would now rethink their travel plans. Exchange rate movements, the carrier added, would add £25m to costs.

Another profit warning came from the London-focused estate agent Foxtons. Its shares dived 25% after it said Brexit would hit sales for the rest of the year. Shares in so-called challenger banks such as Virgin Money were also pummelled.

Osborne spoke after it emerged that the Bank of England governor, Mark Carney, had*cancelled a trip to Portugal*to remain in the UK to oversee any response from Threadneedle Street.

The Bank’s financial policy committee, set in the aftermath of the financial crisis to look for threats to stability, will meet on Tuesday, when the Bank of England will again offer emergency loans to banks as part of its Brexit planning.

The fallout from the vote is being felt around the world. Italy’s main index fell 4%, extending Friday’s record losses of 12.5%. In Germany and France there were losses of 3%. At the time of the London close, on Wall Street the main share indices were all down more than 1%.

The chancellor may have taken some comfort from the fall in yields on 10-year government bonds. Yields on these gilts, which move inversely to prices, fell below 1% for the first time. This fall in gilt yields will keep government borrowing costs down and lead to lower mortgage rates. However, they also mean*pension companies have started cutting the amount paid to the newly retired.

Osborne refused to repeat his pre-vote warning of a Brexit recession, saying only that the economy would face “adjustments”. But analysts started to cut their forecasts for UK growth. Goldman Sachs, forecasts just 0.2% growth in 2017, down from 2% predicted previously.

The consultancy Oxford Economics said interest rates could be slashed to 0% within weeks. Morgan Stanley analysts said European and UK stocks would fall up to 10% over the coming months and sterling would fall to between $1.25 and $1.30.

So far so good lads, all of this stuff is just a series of unfortunate coincidences and we'll more than make up the deficit in St George Cross flag sales over the next month anyway, plus The Queen is going to have a chat with the Commonwealth about some awesome trade deals where they just give us free stuff and I heard that we're repatriating the colonies next Tuesday. Then they'll upgrade us to a new credit rating that doesn't even exist yet, because it's so good that no one else has it. BrexTHAT, sucka.

[GiRTh]

When are we all gonna be rich? When are we gonna be dictating to Europe?

[arista]

Yes From AAA

to AA

Sadly

[Toy Soldier]

Originally Posted by GiRTh

When are we all gonna be rich? When are we gonna be dictating to Europe?

Prince Harry is going to do that, he's currently in Japan trying to trade in his pokemon cards for scraps of offal but apparently no one there will buy from a Brit . Dunno what that's all about, another coincidence probably.

[jaxie]

It's been 3 days, give it some time. It will settle down.

[GiRTh]

Originally Posted by Toy Soldier

Prince Harry is going to do that, he's currently in Japan trying to trade in his pokemon cards for scraps of offal but apparently no one there will buy from a Brit . Dunno what that's all about, another coincidence probably.

So many coincidences recently.

[GiRTh]

Originally Posted by jaxie

It's been 3 days, give it some time. It will settle down.

How long six months, six years, sixty years? No ones got any kind of a clue.

[T*]

Originally Posted by Toy Soldier

Prince Harry is going to do that, he's currently in Japan trying to trade in his pokemon cards for scraps of offal

-sniff sniff-
I SMELL RACISM

[T*]

but yes y'all need to calm down and watch it settle down rather than jumping to conclusions and acting like you're on a moral high ground for thinking that the country is going to crumble

[GiRTh]

Originally Posted by Tom*

but yes y'all need to calm down and watch it settle down rather than jumping to conclusions and acting like you're on a moral high ground for thinking that the country is going to crumble

Again the question no one can answer - How long before it settles down?

[Toy Soldier]

You talk about it like it's little blips, a little turbulence. The fact that people are stubbornly refusing to even acknowledge what sort of impact this has had is probably more worrying than the drops themselves.

[Toy Soldier]

Originally Posted by GiRTh

Again the question no one can answer - How long before it settles down?

Best to leave it open. Then when it takes 5 years, they can say they meant precisely 5 years.

[Tom4784]

We're ****ed because a bunch of naive people didn't know what they were voting for. The Brexit campaign offered no solutions, no plans, just what ifs and blind optimism and now we're facing the prospect of a crushing recession because people refused to listen to the experts who called this months ago because they didn't like what was being said.

People are going to lose their livelihoods and their homes because of this decision and for what? NOTHING. There's no waiting for things to get better, being optimistic and ignoring the facts is what got us in this ****ing mess to begin with. It's time to face the ****ing reality of the situation because that's the only way things will get better, ignoring the fact that the UK majorly ****ed up helps no one.

We are in deep **** and we have to accept it, burying our heads in the sand achieves nothing.

[Kizzy]

Originally Posted by Tom*

but yes y'all need to calm down and watch it settle down rather than jumping to conclusions and acting like you're on a moral high ground for thinking that the country is going to crumble

How is having a concern about economic stability moral?...

[Vicky.]

Originally Posted by Toy Soldier

So far so good lads, all of this stuff is just a series of unfortunate coincidences and we'll more than make up the deficit in St George Cross flag sales over the next month anyway, plus The Queen is going to have a chat with the Commonwealth about some awesome trade deals where they just give us free stuff and I heard that we're repatriating the colonies next Tuesday. Then they'll upgrade us to a new credit rating that doesn't even exist yet, because it's so good that no one else has it. BrexTHAT, sucka.

Its just project fear still trying to scare people even though scaring people makes no difference now as the vote is cast

[GiRTh]

Originally Posted by Toy Soldier

Best to leave it open. Then when it takes 5 years, they can say they meant precisely 5 years.

The fact no one has any kind of clue is quite worrying to me. These were the promises made yet now no one wants to commit to any kind of timescale.

[bitontheslide]

its not like we weren't warned we would be hit financially, and our rating wont improve anytime in the mid term.

What that rating means is that we will have to pay higher interest on the loans that the uk has, which means we will have less money available to fund public services.

We went from an environment where we had a large safety blanket of the EU to being on our own, so don't expect the rating to be a blip, its a lot more permanent than that and we can only hope that we don't get further downgraded. I would imagine the extra interest payments we now have to make are not far off what we pay in contribution to the EU ... so we are significantly worse off while in the transition period.

[Toy Soldier]

Originally Posted by bitontheslide

its not like we weren't warned we would be hit financially, and our rating wont improve anytime in the mid term.

What that rating means is that we will have to pay higher interest on the loans that the uk has, which means we will have less money available to fund public services.

We went from an environment where we had a large safety blanket of the EU to being on our own, so don't expect the rating to be a blip, its a lot more permanent than that and we can only hope that we don't get further downgraded. I would imagine the extra interest payments we now have to make are not far off what we pay in contribution to the EU ... so we are significantly worse off while in the transition period.

That's what it amounts to... not one penny of the "savings" being made by exiting the EU will ever be seen by the general public in any meaningful way, and that's a best case scenario. More realistically there will be a significant net loss, and as we still have the same Tory government, based on their track record that deficit will be taken from public services, the disabled, and the working & middle classes. It utterly staggers me that people were duped into this with promises of golden eggs, and that most are still desperately insisting that it is indeed going to work out that way. I guess that's easier for people than facing the truth that they have "democratically voted" themselves into a massive hole.

The most ironic thing? If you take a look at the demographics of "Leave" voters, it becomes painfully obvious that they are the very same people who are going to suffer most from the decision on a personal level.

[joeysteele]

Originally Posted by bitontheslide

its not like we weren't warned we would be hit financially, and our rating wont improve anytime in the mid term.

What that rating means is that we will have to pay higher interest on the loans that the uk has, which means we will have less money available to fund public services.

We went from an environment where we had a large safety blanket of the EU to being on our own, so don't expect the rating to be a blip, its a lot more permanent than that and we can only hope that we don't get further downgraded. I would imagine the extra interest payments we now have to make are not far off what we pay in contribution to the EU ... so we are significantly worse off while in the transition period.

Absolutely,you have said all I was going to and much more too.

[Cherie]

The London news made grim viewing..recruitment freezes, 25 per cent of companies considering moving their headquarters out ..and even less taxes for the treasury if Mayor Khan gets his wish for London to control their own finances, it's every man for himself now, buts it's Great Britain innit

[Kizzy]

*Doesn't say 'I told you so'*

[DemolitionRed]

https://www.theguardian.com/business...-business-live

So our Governments borrowing costs are at a record low but they are all too busy squabling to even notice this fantastic opportunity. This is the moment when so many things can be put right.

[T*]

Originally Posted by GiRTh

Again the question no one can answer - How long before it settles down?

Exactly- no one knows.
So lets give it a chance. IF thing do start going tits up further along the way, that's when we panic.

[MB.]

I'm fairly sure the time for "giving things chances" was when we were voting to put ourselves into this mess, not now that we have to find a solution to get ourselves out of it

[joeysteele]

Originally Posted by MB.

I'm fairly sure the time for "giving things chances" was when we were voting to put ourselves into this mess, not now that we have to find a solution to get ourselves out of it

Well said.