Leaviss: US will lose AAA-rating after 2012 elections

M&G's head of retail fixed interest Jim Leaviss has warned the US will see its credit rating downgraded to AA shortly after next year's presidential election.

The bond manager said even if a new president is appointed in November 2012, it is unlikely they will come up with a long-term austerity package to address the country’s soaring debt levels. “Almost 10% of the US government’s revenues are being paid on interest payments – this is something the rating agencies will not stand for and the country will lose its AAA-rating if this is not addressed,” said Leaviss. “Even if a new president comes in next year, they will not come up with a long-term strategy, so the country will become AA-rated as there is no political will to come up with a p...