This is bad news. A drop in a credit rating by one agency does not matter that much in itself, for heaven knows, the rating agencies have been absurdly wrong in their judgements. The AAA ratings they gave to dodgy US housing debt were one of the factors in the banking crash of 2008. Both the US and France have seen a similar modest downgrading of their debt. But it matters because it focuses investors on the inherent weakness not just of British national finances at the moment but also of the longer-term commitment of the UK authorities to holding down inflation and assuring investors that they will get paid back in real – rather than devalued – money.
The pound has plummeted on international exchanges after a surprise split emerged on the Bank of England’s Monetary Policy Committee (MPC) about whether more stimulus should be injected into the struggling British economy.
Plastic bank notes could soon replace paper money in Britons' wallets, the incoming governor of the Bank of England has hinted.
Relaxed but no revolutionary, Mark Carney keeps banking reform on the table
The Bank's new Governor, Canadian Mark Carney, is a dark horse who is needed to bring in a new beginning, says Russell Lynch
Bank of England Governor Sir Mervyn King has said he is "pessimistic" over the chances for a eurozone recovery and warned Britain is still not halfway through the financial crisis.
Fears of new credit crunch prompt Bank of England to kickstart emergency lending scheme
'Vested interests' are trying to kill reforms, warns Governor of the Bank of England
King leafed through the Financial Services Bill, marvelling at MPs’ ability to understand it
Former Chancellor's memoirs claim economic rift with PM stripped Labour Party of its credibility. Nigel Morris reports
Tony Blair found it so difficult to work with Gordon Brown that he complained that "dealing with GB is like having dental treatment with no anaesthetic", Alistair Darling recalls in his memoirs.
Alistair Darling confirms that Gordon Brown tried to prise him out of the Treasury in 2009 to put Ed Balls in his place
Bank of England Governor's dire warning on state of the economy
Economic Life: The Governor did cross an important line in May. If he agrees with the Coalition, as he has said, then he necessarily disagrees with Labour
The WikiLeaks disclosures have shown us Washington realpolitik stripped bare. But just imagine how much worse an isolationist US would be.
Mervyn King, the Governor of the Bank of England, faced a call for his resignation yesterday amid fresh claims that he has overstepped the mark by becoming embroiled in politics.