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BRITAIN LOSSES IT'S TOP AAA CREDIT RATING 2013


To: The Right Honourable British Chancellor of the Exchequer George Osborne MP

From: Athinarayanan Sanjeevraja

Date: March 4, 2013

RE: Britain Losses it’s Top AAA Credit Rating and try to regain its status.

Good Afternoon Mr. Chancellor. I have said so in my last writing to you on September 28, 2012 on the subject of UK Breaking Debt Rule. I informed you how long and painful the process of reducing debt would be and how your government can reduce the debt without choking of recovery and global demand. Here it was my last writing to you. “UK keeps it top AAA credit rating because market expects that your government would keep the budget tight. But your government failed to keep the budget tight. If you lost AAA credit rating, interest rates will shoot up and UK will never be able to diminish its deficit. Indeed, UK GDP is shrinking. Therefore there will be less tax revenues to reduce fiscal deficit. But I don’t see any attempts by your government to diminish the fiscal deficit during 2012. UK adopted austerity plans in the past two years to limit government spending and keep borrowing rates very low but the UK economic recovery remains challenge due to weak global economy and banking troubles across major developed economies. Your government is not executing effective fiscal consolidation programme which should not restrain economic growth”. If I am not mistaken, UK banking system is not stable, banks are not lending, exports is not rising, housing is not stable, private investment is not recovering and structural reforms are not in place. It is very difficult for UK government to regain its AAA status in a year. I insisted many times your good office, UK need renewed investment in non-financial businesses to reduce government deficits. If UK want to regain its AAA status, you need intense focus on export market, corporate tax used to attract inward investment, explicit targeting on high value FDI, ensure SME have adequate access to finance, encouraging business growth and structural reforms should be in place. What I observed, most of the policy makers around the world heading in different directions because of that there will be no hope of actually making any progress. If UK wants to improve its public finances, you should impose heavy tax on tobacco products and luxury items, reduce NHS costs, and reduce benefits spending. I am confident that these all have positive impact on net revenues and would have significant benefits for UK economy.       

Thank you very much for your kind attention Mr. Chancellor.    

Sincerely regards,
Athinarayanan Sanjeevraja
Athinarayanan Advisory Authority
Athinarayanan Twitter. 

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