The beginning of the end of UK's safe haven status?

[sunpearl71]

UK's AAA credit rating cut to Aa1 by Moody's

Has this already been priced-in through the British Pound's recent fall against the USD and EUR?

http://www.bbc.co.uk/news/business-21554311

[unlucky]

Re: The beginning of the end of UK's safe haven status?

UK's AAA credit rating cut to Aa1 by Moody's

Has this already been priced-in through the British Pound's recent fall against the USD and EUR?

http://www.bbc.co.uk/news/business-21554311

Perhaps there was some complacency about the UK while the Eurozone crisis was ongoing. After all the UK could print whereas troubled EU economies could not, and this was cited as a reason for preferring UK debt over Eurozone debt. But now Mr. Draghi has allowed the possibility of Eurozone economies to print (albeit under constrainted circumstances). So the focus has returned to UK economic performance, and the results are not pretty.

It's interesting to compare the UK versus the US in terms of policy mix. The UK has been more aggressive in pursuit of monetary easing but has opted for fiscal austerity. Result: lower unemployment and higher inflation.

The US also chose monetary easing, but has been relatively less aggressive than the UK, and until recently has maintained a more accommodative fiscal stance. Result: higher unemployment and lower inflation.

These are the opposite to what one would expect. I've no idea why. Obviously the two economies are not directly comparable, but I can't identify why they have experienced such different outcomes. The results, if taken at face value, suggest that both of these economies have to chooose between high unemployment versus high inflation, they cannot optimize both at the same time, and that the key lever is monetary (not fiscal) stance.