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Originally Posted by Chris
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But I don't think the report quite says what he says. For example..
http://www.moodys.com/research/Moody...Aaa--PR_266844
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More specifically, projected tax revenue increases have been difficult to achieve in the UK due to the challenging economic environment. As a result, the weaker economic outturn has substantially slowed the anticipated pace of deficit and debt-to-GDP reduction, and is likely to continue to do so over the medium term.
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He used that line in debt-to-GDP ratio to support this argument but Moody's do not seem to be saying one or the other. Just that the debt combined with the low income mean the Government will miss their target.
At the top of the report they give their three reasons:
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The key interrelated drivers of today's action are:
1. The continuing weakness in the UK's medium-term growth outlook, with a period of sluggish growth which Moody's now expects will extend into the second half of the decade;
2. The challenges that subdued medium-term growth prospects pose to the government's fiscal consolidation programme, which will now extend well into the next parliament;
3. And, as a consequence of the UK's high and rising debt burden, a deterioration in the shock-absorption capacity of the government's balance sheet, which is unlikely to reverse before 2016.
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