All eyes on the Pre-Budget Report tomorrow - basically a daft name, as it's really an autumn Budget statement, with little to differentiate it from the main spring Budget.
We can debate the pros and cons of the PBR - personally I'd prefer to scrap the Budget entirely and just introduce finance bills like any other bill in the Queen's speech - but in the current economic crisis, we'd certainly expect a set-piece like this to provide a platform for lobbyists who want to exercise disproportionate influence on government policy.
Which is presumably why credit rating agency Moody's has just come out with an assessment that the UK (and the US) could "test the boundaries" of the top AAA credit rating due to the high debts being incurred because govt revenues have collapsed in the wake of the economic crisis. A summary is provided here by the unusual (for giroscope) source of the Taipei Times: I couldn't find a decent UK-based reference, having just seen the report on Channel 4 News.
On the face of it, downgrading the UK's status from AAA seems totally absurd. Debt is currently predicted (by OECD) to reach around 90 per cent of GDP in 2010. Many countries have run debt levels a lot higher than 100 per cent with no long-run problems. We've got a hell of a long way to go before we reach that point. So why are Moody's acting nervous?
When viewed rationally, the issue must be political rather than economic. Moody's is run by banking types who do not like the Labour government - particularly if, as is quite possible, it is set to move a bit further for the left - and so they want to engineer a financial crisis by downgrading the UK, ensuring a Tory victory in the 2010 election, at which point they will upgrade it again. It's the dirty tricks brigade - simple as that. And anything Moody's are putting out now is at least as dodgy as the infamous 2003 dossier from the UK "Intelligence" (ha!) services on Saddam Hussein. Alastair Darling should say as much in tomorrow's speech, and should point out that the credit rating agencies - who were shown up to be a complete bunch of clueless morons when 'safe' investments went belly-up in the credit crunch - are deliberately bullshitting investors for political ends. This govt has reaped the biggest dividends from the current crisis when it has faced down the bankers and squared with the electorate. And I do believe the best in this vein is yet to come.