Moody’s Investors Service said its top debt ratings on the US and the UK could “test the AAA boundaries” because their public finances were worsening in the wake of the global financial crisis.
The UK and US had “resilient” AAA ratings, as opposed to the “resistant” top ratings on Canada, Germany and France, Moody’s said in a report yesterday. None of the top-rated countries were “vulnerable,” or had public finances that were “stretched beyond the point of ‘no return’ to the AAA category,” the report said.
The pound fell against all 16 most-traded currencies, dropping as much as 0.4 percent to £1.6381 versus the dollar. Public finances in “resilient” AAA-rated countries are “deteriorating considerably and may therefore test the AAA boundaries,” Moody’s said.
All AAA-rated governments were affected by the global financial crisis, with differences in their impact and ability to respond, Moody’s analysts led by Pierre Cailleteau said in the report. “Resistant” countries, which also include New Zealand and Switzerland, started from a more robust position and won’t see debt exceed levels consistent with their AAA status, Moody’s said.
British Chancellor of the Exchequer Alistair Darling said on Monday that he would rather suffer criticism for removing support for the economy too late than too early. The remarks suggested he will put off measures to reduce the UK’s biggest budget deficit since World War II.
The UK entered the crisis in a vulnerable position and is now facing an “inexorable deterioration of debt affordability,” Moody’s said.
The UK’s public debt will swell to 89.3 percent of the economy next year from 75.3 percent this year, the Organization for Economic Cooperation and Development (OECD) said.
The US’s debt burden will climb to 97.5 percent of GDP next year from 87.4 percent, the OECD forecast in June.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
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