Belgium's credit rating cut as Italian bond rates soar
Belgium's credit rating was downgraded yesterday amid fears of
European recession and continued failure by the Low Countries
nation to agree a settled government.
Standard & Poor's lowered Belgium's rating from AA+ to AA, which prompted politicians to resume talks on next year's budget, which, it is hoped, will reduce high debt and deficit levels.
The credit agency cited "protracted political uncertainty" as a risk to Belgium's creditworthiness. The country has lacked a permanent government for more than 530 days and the agency said the caretaker administration "lacks a mandate to implement deeper fiscal and structural reforms". The country's yields on long-term bonds are closing in on 6 per cent, not far short of the 7 per cent that has pushed other European nations into international bailouts.
The downgrade came as Italy paid a record 6.5 per cent to borrow money over six months and its longer-term funding costs soared far above levels seen as sustainable for public finances, raising the pressure on Rome's new emergency government.
The auction yield on the six-month paper almost doubled compared with a month earlier. Although Italy managed to raise the full planned amount of €10bn (£8.6bn), weakening demand and the highest borrowing costs since it joined the euro frightened investors, pushing Italian stocks lower and bond yields to record highs on the secondary market. Yields on two-year Italian bonds soared to more than 8 per cent in response, a euro lifetime high. It now costs more to borrow for two years than 10 on the secondary market.
- 1 Australia to impose 24-hour curfew on all cats to protect endangered species
- 2 Model's video shoot on the beach interrupted by sudden landing of a group of illegal migrants
- 3 The difference between a psychopath and a sociopath
- 4 Black and ethnic minority people twice as likely to be hit by Tory cuts than white people, report finds
- 5 MH370 search: Boeing 777 wing that could match missing plane found on the French island of Reunion
Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
Australia to impose 24-hour curfew on all cats to protect endangered species
Israel accused of killing 75 children during day of 'carnage' and war crimes in Gaza war
MH370 search: Boeing 777 wing that could match missing plane found on the French island of Reunion
Madeleine McCann 'not the identity' of fair-haired girl found dead in suitcase in Australia
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
I am the Jeremy Corbyn supporter that many will tell you doesn't exist
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
Labour leadership contest: I would never quit the party, says Liz Kendall
iJobs Money & Business
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...
£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...
£12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...