Credit rating agencies still not very good at rating credit

The University of Cambridge is apparently a safer investment than the UK.

More ratings-agency craziness. Cambridge University is entering the bond market for the first time, and Moody's has rated its debt as safer than Britain's. The Financial Times' Michael Stothard and Chris Cook report (£):

Britain’s richest and second-oldest university issued a 40-year, £350m bond, taking advantage of low yields to fund a new laboratory for stem-cell research and accommodation for postgraduates.

The bond, priced at 60 points over gilts, was well received. Last week, the university was awarded a triple A rating by Moody’s. The agency said the rating reflected Cambridge’s “outstanding market position, significant amount of liquid assets and strong governance structure”.

Yet more evidence that ratings agencies "quite simply don't understand what they themselves are saying", in the word of NIESR's Jonathan Portes. As Matt Yglesias writes, there is no possible situation in which Cambridge bonds, denominated in British pounds could be safer than UK sovereign debt:

When the UK government borrows money, it borrows pounds sterling. The UK government also has the capacity to create infinite quantities of pounds sterling instantaneously. Therefore, the UK government can never be forced by economic circumstances into defaulting on its debt obligations. At worst it could be forced into inflationary policies that erode the value of its pound-denominated debt. If you're an investor, that's a real thing to worry about when buying British debt. But any such inflation would equally impact any pound-denominated debt no matter what the circumstances of the issuer. University of Cambridge debt can't be safer than UK sovereign debt in inflation terms.

The bizarre decisions made by the ratings agencies have always been there – back in 2002, for instance, Moody's downgraded Japan below Botswana – but finally, awareness is starting to become more widespread. If that awareness can penetrate the world of finance, then the end of their influence may be nearer than it looks.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Could tactical voting stop Brexit?

Could tactical votes soften the Brexit blow?

Could tactical voting save Britain from the hardest of exits from the European Union?

That's the hope of Open Britain, which has unveiled a list of 20 seats held by supporters of a hard Brexit (19 Conservatives and one Labour MP, Kate Hoey) in areas that either split evenly in the referendum or backed a Remain vote, and a list of 20 seats held by pro-Europeans: among them Labour MPs Pat McFadden and Liz Kendall, Liberal Democrat MPs Nick Clegg and Tom Brake, and Caroline Lucas, the Greens' sole MP. (Read the full list here.)

"Remain group seeks to oust pro-Brexit MPs" is the Guardian's splash. The intiative has received the thumbs up from Peter Mandelson on Newsnight and Tony Blair in the Guardian. But will it work?

A quick look at the seats in question shows the challenge for anyone hoping for a pro-European front to frustrate Brexit. Theresa Villiers has a majority of more than 7,000 over Labour: and if you're a voter in Chipping Barnet who backed a Remain vote because you were worried about your house price, is Jeremy Corbyn really the answer to your problems? (That said, it's worth noting that thanks to the scale of the 2015 defeat, Chipping Barnet is one of the seats Labour would have to win to get a majority in the House of Commons.)

Or take, say, Kate Hoey in Vauxhall, one of the few people in Labour who can claim to be a unifying figure these days. Yes, she is deeply unpopular in her local party who have mounted several attempts to remove her. Yes, Vauxhall voted heavily to Remain. But - as Jessica Elgot finds in her profile for the Guardian- it also has a large amount of social housing and has more children living in poverty than all but 51 other seats in the House of Commons. There are a great number of people who believe their own interests are better served by sending a Labour MP to Westminster rather than refighting the referendum.

That's a reminder of three things: the first is that the stereotype of the Remain vote as people straight out of the Boden catalogue misses a number of things. The second is that for many people, Brexit will take a back seat.

But the big problem is that you can't make an anti-Brexit - which, by necessity, is essentially an anti-Conservative - alliance work if the main anti-Conservative party is so weak and unattractive to most people. "Voting pro-European" may give Labour's Corbynsceptics a way to advocate a vote for Labour that doesn't endorse Jeremy Corbyn. That doesn't mean it will succeed in stopping Brexit.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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