Updates Around The World

In the US:

The US debt ceiling has been a hot topic. Obama and republicans have clashed over requests to raise the debt ceiling and plans to reduce government spending and to raise taxes. If a new deal is not made by early August we may find the world's foremost government defaulting on its debts - not good news.

In the UK:

Across the pond in the UK figures have been released by the ONS (Office for National Statistics) of the Q1 GDP showing 0.02% growth. This figure is way below forecasts of 1.7% growth for 2011. Analysts put this down to negative factors such as the  Japanese Tsunami, however they also note the positive role the royal wedding had on GDP growth.


Kind regards,
Sam

US Government Debt Rating In Question

Credit rating agencies are currently reevaluating the AAA debt rating of the US government. Moody's and Standard and Poor have both announced that they may downgrade the rating.

What will this result in if they are cut? I hear you ask. Well, if these rating agencies downgrade the investment grade on the US government there will be several repercussions:

-Firstly it will cost the US government more to borrow money
-It will decrease investor confidence in government bonds
-And lead to an overall negative effect on the US economy

Kind Regards,
Sam