U.K. Credit Rating Cut to AA by S&P With Negative Outlook

U.K. Credit Rating Cut to AA by S&P With Negative Outlook

Assessment

Interactive Video

Business

University

Hard

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The United Kingdom has been downgraded from AAA to AA by Standard and Poor's, with a negative outlook. Despite this, the bond market shows a different reaction, with UK gilt yields dropping below 1% for the first time. This indicates a strong demand for safe-haven assets, not only in the UK but also in Japan and Germany. The downgrade is seen as a loss of prestige for the UK, but the market's response suggests continued confidence in UK government debt.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the new credit rating given to the United Kingdom by Standard and Poor's?

BBB

AA

AAA

A

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How did the bond market react to the UK's credit rating downgrade?

Gilt yields remained stable

Gilt yields increased significantly

Gilt yields were unaffected

Gilt yields dropped below 1%

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the reaction of the British pound to the credit rating news?

It surged to new highs

It remained stable

It experienced the biggest two-day loss ever

It gained 3% in value

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which other countries were mentioned as having record low yields similar to the UK?

China and India

Canada and Australia

Japan and Germany

France and Italy

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the significance of losing a AAA credit rating for a country?

It leads to immediate economic collapse

It indicates a strong economic position

It has no impact on the country's economy

It is considered a loss of prestige