Sterling was hammered today against its major rivals and surrendered to the dollar after downbeat comments from Moody's analyst, Sarah Carlson, saying the Kingdom is at risk of losing its top credit rating.
The spokesman for Moody's Investors Service said that the outlook for the U.K.'s AAA rating remains stable yet did not help unwind the complete downside pressures on sterling.
Francesco Meucci, Moody's deputy head of media relations in Europe, Middle East and Africa, said in phone interview from Paris that the central scenario is that the U.K. Rating remains Aaa and the outlook is stable, and he added saying that slower growth combined with weaker than expected fiscal consolidation efforts could cause the U.K.'s debt metrics to deteriorate to a point where we would reconsider our stance.
His comments came after Market News international cited Moody's analyst Sarah Carlosn saying We believe that slower growth combined with weaker-than-expected fiscal consolidation efforts could cause the UK's debt metrics to deteriorate to a point that would be inconsistent with a Aaa rating.
Sterling declined to trade at $1.6366 from the earlier highs of $1.6449; the royal pound also slumped versus the Japanese yen to currently trade around 130.69 weakening from the earlier highs of 131.93 and versus the euro it also weakened to 0.8954 a euro from earlier at 0.8920 a euro.