Markets react to UK downgrade by doing basically nothing

*Yawn*.

We've said again and again and again that credit rating agencies have very little economic effect, and Friday's downgrade of Britain from Aaa to Aa1 rating is proving that to be the case yet again.

The UK government's cost of borrowing, as you can see in this chart via Sky's Ed Conway, is already back at the level it was before the downgrade — and actually lower than it was when markets opened on Friday:

 

Image: Bloomberg

The pound, meanwhile, is stable against the dollar and only slightly down against the Euro. In the context of its yearlong drop, that's a positive:

 

Image: Thompson Reuters

So long as Cameron and Osborne are prepared to ignore the message the downgrade sends — and let's be clear, despite the economically incoherent reasoning Moody's give, the message is that austerity has failed — the markets will continue to respond with a deafening "meh".

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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George Osborne takes up job at BlackRock - but what does it mean for politics?

The former Chancellor insists he hasn't forgotten about the Northern Powerhouse.

George Osborne is to take up a part-time role at asset management giant BlackRock.

The former Chancellor is understood to have been hired by the chief executive of the world's biggest investor, Larry Fink. He will be working alongside his former economic adviser Rupert Harrison.

The appointment has been approved by the Independent Appointments Committee and Osborne intends to continue as a backbench MP.

He said: "I am excited to be working with the BlackRock Investment Institute as an adviser. BlackRock wants better outcomes for pensioners and savers - and I want to help them deliver that. It's a chance for me to work part-time with one of the world's most respected firms and a major employer in Britain. 

"The majority of my time will be devoted to being an MP, representing my constituents and promoting the Northern Powerhouse.  My goal is to go on learning, gaining new experience and get an even better understanding of the world."

Once tipped as a future Prime Minister, Osborne's career ambitions were stymied after he backed Remain in the EU referendum and was sacked in Theresa May's Cabinet reshuffle. Whether he will find the halls of fund managers more comfortable than the green back benches is yet to be seen, but for now he has been clear he intends to continue his constituency duties. 

He will work at the BlackRock Investment Institute, which researches geopolitical, technological and economic trends. 

He is expected to provide insights on European politics and policy, Chinese economic reform, and trends such as low yields and longevity and their impact on retirement planning. 

While the pay packet has not been officially confirmed, Sky News quoted a source saying it would be hundreds of thousands of pounds.

But the move will also place a pro-Remain former Chancellor at the heart of the City of London, just as his Tory front bench is losing its support over Brexit negotiations.

Speaking shortly after the EU referendum vote, BlackRock chief executive Fink said he "didn't get a lot of sleep" the night of Brexit, and that the decision had led to greater uncertainty. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.