Investors shoot down prospect of full US downgrade

Investors have said it is unlikely a full-blown downgrade of the US will take place in the next few years following yesterday's move by S&P.

The ratings agency sent markets tumbling after it slashed its US outlook from stable to negative, the first time it has done so for 70 years. S&P said a lack of a clear plan on how to tackle the country's fiscal deficit was its main concern. The move means there is a one in three chance S&P will now cut its AAA-rating on the US, but managers said they did not expect this to happen in the foreseeable future. Tim Roberts, North America fund manager at Cavendish Asset Management, said: "It is unlikely the S&P will downgrade US debt over the coming years. "The US will continue to be...