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:
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".