What took you so long S&P?

Ratings agency Standard & Poor's has lowered its outlook on Britain to negative while affirming its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings. These are the people who rated AIG credit default swaps at the same level not so long ago.

"We have revised the outlook on the UK to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100 percent of GDP and remain near that level in the medium term," Standard & Poor's credit analyst David Beers said in a statement.

Clearly Mr Beers should have read this blog a little more. 100 percent of GDP? The public sector pension liabilities alone come close to that figure and they don’t show up in government debt figures. Then you have to add in all the other hidden liabilities, such as PFI and government guarantees thrown about like confetti. I really ought to update my video on Youtube, but the facts keep changing.

Beers said S&P had a more cautious view than the UK government of "how quickly the erosion in the government's revenue base may be repaired, the extent to which the growth in government spending can be curtailed, and consequently the pace at which historically high fiscal deficits are likely to narrow".

Too true. The IMF has the same view. The usual solution for countries faced with a deficit that is 12% of GDP is to increase banana production.