S&P dismisses immediate US downgrade

22 November 2011

Standard & Poor's (S&P) has indicated that the US will not suffer from an immediate credit rating downgrade purely on the basis of a lack of a credible debt relief plan.

Yesterday (21 November), it emerged that the congressional "super committee" comprised of officials from both the Republican and Democrat parties had failed to reach an agreement on how to resolve this ongoing issue.

The panel was established around three months ago with the remit of formulating a proposal to combat the country's mounting debt crisis, but has now admitted this was not possible.

However, despite this development, S&P has moved to assure the markets that it will not now automatically mean the country's rating is reduced.

In a statement, the agency indicated this failure is "consistent with our 5 August decision to lower our rating to AA-plus".

Last week, S&P revealed it is planning to review the scores of the 30 biggest banks across the world before the end of the year.

By Asim Shah

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