Leaviss: UK moving closer to AAA downgrade

The UK is increasingly likely to lose its AAA credit rating - but this may not spell disaster for the domestic bond market, according to M&G's Jim Leaviss.

Leaviss, head of retail fixed income at M&G, said the UK's deteriorating growth rate and fiscal position make it increasingly likely it will lose its "prized AAA rating", but questioned the impact such a loss would have. With quantitative easing set to continue and the base rate unlikely to rise above 0.5% any time soon, a sovereign credit downgrade will likely spell political embarrassment rather than economic crisis, Leaviss said, despite the UK's debt profile continuing to deteriorate. "Failing to both get government spending down, and to grow the economy means that that debt/GDP r...