The sting in the tail – and there nearly always is one – was the decision to keep the nation on so-called “negative outlook”. Miss your fiscal goals, Mr Osborne, and you can wave goodbye to that gold-plated sovereign status.
Quite apart from whether any country should pander to a bunch of number crunchers who appear insulated from the real world, it is clear that the Treasury has limited space to absorb further economic shocks.
There was welcome news too last week on several other fronts, with a positive revision to gross domestic product in the second quarter and the most robust reading of the powerhouse services sector in more than a year.
Yet the celebrations were, at best, muted as markets continued to focus attention on the Eurozone with Spain joining Greece in staring into the abyss.
Less than ten months after Spanish PM Mariano Rajoy swept to power promising much, the once-proud kingdom finds itself blighted by record unemployment – around one in four adults is out of work while half the young can’t get a job – a banking industry on the brink of collapse, a housing sector in freefall and rioting on the streets.
Most of the wounds have been self-inflicted. Regional governments, now bankrupt, have paid the price for years of maladministration, corruption and countless white elephant projects.
It remains to be seen if Madrid will admit defeat and seek a full-blown state bailout. Crippling bond yields may yet force its hand.
These are worrying times for any manufacturer or services provider looking to export its wares. The Eurozone remains Britain’s biggest trading partner and the social and economic meltdown in Greece and Spain, which threatens to spread to other common currency nations, is of grave concern.
For the time being, Britain appears to be coping with austerity in a resiliently British way, though many of the big cuts have yet to kick in, particularly at a local council level.
Savvy businesses eyeing growth have had to look further afield for custom, and emerging nations such as China and India have made up for some of the trade lost across the Channel.
Supporters of the single currency advocate closer integration and see the current crisis as a blip. Eurozone detractors, on the other hand, must be wondering how many attempts at revival are necessary before you declare the patient dead. With further doses of austerity on the cards, a break-up moves ever closer.
Tesco can cope with bad news
A WHEEL or two will fall off the Tesco juggernaut this week when the supermarket giant reveals its first fall in profit for 20 years.
Management, led by chief executive Philip Clark, are certain to highlight the group’s progress in overseas markets and attempts to revive trade closer to home.
Britain’s biggest grocer has been investing heavily on price promotions, extra staffing and new-look stores in the wake of January’s shock profit warning. As a result, the bottom line is likely to have suffered. But with a 30 per cent or so market share,it remains the UK retail sector’s driving force.