U.K., U.S. Top Aaa Ratings Tested by Debt Burdens, Moody’s Says

 U.S. and the U.K. may “test the Aaa boundaries” because public finances are worsening in the wake of the global financial crisis.

“The deterioration has been pretty severe….“We expect a pretty strong policy response in the next couple of years in order to keep the debt in the Aaa range. We expect them to bend but not to break.”

huge increase in debt-to-gross-domestic- product ratios as a result of the crisis,”to 97.5 percent of gross domestic product next year from 87.4 percent….UK.’s public debt will swell to 89.3 percent of the economy in 2010 from 75.3 percent this year,

cost of protecting U.S. debt from default was unchanged at 32 basis points, or $32,000 a year to protect $10 million of the nation’s bonds from default for five years, according to CMA DataVision prices. That compares with a peak of 100 basis points in February and 20 basis points in October.

government debt cost 74 basis points, up from 72.5 yesterday, according to CMA prices. The U.K. contracts, which peaked at 175 basis points in February, rose from 44 basis points on Sept. 30,

U.K., U.S. Top Aaa Ratings Tested by Debt Burdens, Moody’s Says - Bloomberg.com