Still true: nobody cares if a country's credit rating gets cut

A country's rating gets cut. Do bond yields go up or down? Toss a coin.

Remember how nobody cares if a country's credit rating gets cut? Well, nobody cares if a country's credit rating gets cut. Still.

Reporting for Bloomberg, John Detrixhe and Matt Robinson write:

Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of the 32 upgrades, downgrades and changes in credit outlook, according to data compiled by Bloomberg. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974. This year, investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by S&P.

Of course, that's not particularly surprising. As we wrote last time Bloomberg published a similar report, in June:

One of the strengths of markets is that they are very good at pricing in future events. When an outlook changes, a downgrade is likely to follow, and so a lot of the expected spike in yields happens before the actual downgrade.

And all of that doesn't negate the large political implications of a downgrade – even while the rating agencies say otherwise:

U.K. Prime Minister David Cameron raised taxes and reduced outlays in 2010 to save its AAA rating, freezing pay for police, teachers, nurses and doctors, and capping welfare payments. S&P lowered its outlook on the country to negative from stable Dec. 13, citing the weak economy.

“Deciding on policy choices is the domain of governments and their advisors,” S&P said June 22 in a report. “We have not taken sides in the growth vs. austerity debate.”

But it does mean that if the government gives any reason for "safeguarding the UK's hard-won triple-A rating" other than "David Cameron would find re-election difficult", they're stretching the truth somewhat.

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.

Photo: Getty
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The Future of the Left: trade unions are more important than ever

Trade unions are under threat - and without them, the left has no future. 

Not accepting what you're given, when what you're given isn't enough, is the heart of trade unionism.

Workers having the means to change their lot - by standing together and organising is bread and butter for the labour movement - and the most important part? That 'lightbulb moment' when a group of workers realise they don't have to accept the injustice of their situation and that they have the means to change it.

That's what happened when a group of low-paid hospital workers organised a demonstration outside their hospital last week. As more of their colleagues clocked out and joined them on their picket, thart lightbulb went on.

When they stood together, proudly waving their union flags, singing a rhythmic chant and raising their homemade placards demanding a living wage they knew they had organised the collective strength needed to win.

The GMB union members, predominantly BAME women, work for Aramark, an American multinational outsourcing provider. They are hostesses and domestics in the South London and Maudsley NHS Trust, a mental health trust with sites across south London.

Like the nurses and doctors, they work around vulnerable patients and are subject to verbal and in some cases physical abuse. Unlike the nurses and doctors their pay is determined by the private contractor that employs them - for many of these staff that means statutory sick pay, statutory annual leave entitlement and as little as £7.38 per hour.

This is little more than George Osborne's new 'Living Wage' of £7.20 per hour as of April.

But these workers aren't fighting for a living wage set by government or even the Living Wage Foundation - they are fighting for a genuine living wage. The GMB union and Class think tank have calculated that a genuine living wage of £10ph an hour as part of a full time contract removes the need for in work benefits.

As the TUC launches its 'Heart Unions' week of action against the trade union bill today, the Aramark workers will be receiving ballot papers to vote on whether or not they want to strike to win their demands.

These workers are showing exactly why we need to 'Heart Unions' more than ever, because it is the labour movement and workers like these that need to start setting the terms of the real living wage debate. It is campaigns like this, low-paid, in some cases precariously employed and often women workers using their collective strength to make demands on their employer with a strategy for winning those demands that will begin to deliver a genuine living wage.

It is also workers like these that the Trade Union Bill seeks to silence. In many ways it may succeed, but in many other ways workers can still win.

Osborne wants workers to accept what they're given - a living wage on his terms. He wants to stop the women working for Aramark from setting an example to other workers about what can be achieved.

There is no doubting that achieving higher ballot turn outs, restrictions on picket lines and most worryingly the use of agency workers to cover strikers work will make campaigns like these harder. But I refuse to accept they are insurmountable, or that good, solid organisation of working people doesn't have the ability to prevail over even the most authoritarian of legislation.

As the TUC launch their Heart Unions week of action against the bill these women are showing us how the labour movement can reclaim the demands for a genuine living wage. They also send a message to all working people, the message that the Tories fear the most, that collective action can still win and that attempts to silence workers can still be defeated.