Impact of Moody’s downgrade of UK government gilts

25 February 2013 Over the weekend, I found myself musing on the consequences of the Moody’s downgrade of UK government debt for UK pension schemes. Does it really matter: are gilts really safe, what does it mean for the cost of financing the public debt and for pension deficits. In reality, I believe that the change of credit rating by one of the three big agencies tells us next to nothing new about the safety of gilts and that the Moody’s action is likely to have an extremely limited impact on gilt yields. It will likely continue the recent weakness…

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