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.
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
Dennis Rodman will coach the North Korea basketball team
Jennifer Lawrence attacks mass media again over body image
Jennifer Lawrence: 'It should be illegal to call someone fat on TV'
Ian Watkins: Police probed over earlier allegations as paedophile Lostprophets singer sentenced to 35 years for child sex offences
Iain Duncan Smith leaves Commons food banks debate early
DNA from a 50,000 year old toe shows Neanderthals were highly inbred
Devyani Khobragade: India-US row escalates over arrest of diplomat in New York
- 1 America's 'virgin births'? One in 200 mothers 'became pregnant without having sex'
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 Christmas comes early: Justin Bieber is 'retiring from music'
- 4 Iain Duncan Smith leaves Commons food banks debate early
- 5 Children evacuated from swimming pool after prosthetic leg mistaken for paedophile
- < Previous
- Next >
iJobs Money & Business
£500 - £550 per day: Cornwallis Elt : Business Analyst Target Operating Mod...
£500 - £680 per day: Harrington Starr: Murex Business Analyst - 1000 CHF per d...
£60000 - £75000 per annum + Bonus and Benefits: Harrington Starr: A leading au...
£25000 - £32000 per annum: Harrington Starr: Junior Business Analyst - Banking...