Would a UK downgrade mean Armageddon for bonds?

FIXED INCOME

Charlotte Richards asks bond managers about the possible impact of the UK losing its prized AAA rating.

This year has been plagued with rumours that the UK could lose its prized AAA rating. Ratings agencies Moody’s and Fitch placed the UK on a negative outlook earlier this year. Moody’s said the UK’s safe haven status could be at risk if there are any signs of “reduced political commitment” in the attempts to bring down UK debt, while Fitch warned it could downgrade the UK in the next few years if the government does not contain the level of public debt. In June, M&G head of retail fixed income, Jim Leaviss, said the UK looked “increasingly vulnerable” and was likely to lose its AAA ...