Why next few months are key for UK's 'safe haven' status

ON BONDS

Major rating agencies have recently expressed their negative outlook for the UK and we have also increasingly started to question the UK's ‘safe haven' status.

The UK’s economic recovery, as measured by real growth in GDP, has been much weaker than in the US or even the eurozone since the financial crisis. In fact, the economic slump in Britain is worse this time around than during the Great Depression, based on the number of quarters it has taken the economy to begin growing in real terms since the start of the recession. This shows the UK’s existing status as a ‘safe haven’ does not seem to be based on its ability to restore the economy. The UK government’s standpoint is that Britain has been able to safeguard its AAA rating thanks to i...