credit

A SIMPLE holiday error could see a host of benefits including Universal Credit and PIP stopped.

You may even have to pay back any overpaid money and in a worse case scenario an up to £5,000 penalty too.

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Going abroad is classed as a change in circumstances which must be reported to the office that pays your benefits.

If you do not, it may be reduced or stopped and you could be told to pay back any overpaid amounts.

If you are found to have deliberately not reported going abroad, it is classed as benefit fraud and you could be taken to court or asked to pay a penalty of between £350 and £5,000.

However, at which point you have to report going abroad varies based on the benefit you are receiving.

For example, you don’t have to report going abroad if you’re on Attendance Allowance (AA) and going away for less than four weeks.

If you do need to report going abroad, you need to tell your local Jobcentre Plus or the office that pays your benefit.

This is the full list of benefits where you may have to report going abroad this summer:

• Universal Credit
• Jobseeker’s Allowance
• PIP
• Disability Living Allowance (DLA)
• Employment and Support Allowance (ESA)
• Attendance Allowance
• Carer’s Allowance
• Pension Credit
• Housing Benefit
• Statutory Maternity Pay (SMP)
• Maternity Allowance
• Child Benefit
• Guardian’s Allowance

Here are the rules on reporting going abroad for the major benefits.

Universal Credit

If you’re on Universal Credit, you can stay abroad for one month and carry on receiving payments.

You still have to tell your work coach you’re going away and have to carry on meeting the conditions of your claim.

For example, if you are in the intensive work group and have to spend a minimum amount of hours per week looking for a job, you have to continue doing this.

There are exceptions to the one-month rule though – such as if a “close relative” dies while you are abroad and it is not deemed reasonable for you to return to the UK.

Meanwhile, you can carry on claiming Universal Credit for up to six months if you have gone abroad for medical treatment.

You can report going away on holiday by signing in via your Universal Credit account.

Jobseeker’s Allowance

If you are on New Style or income-based JSA you must report if you are leaving Great Britain for any length of time.

You can let the Government know you are going away by calling the JSA helpline on 0800 169 0310.

You can also write to the Jobcentre Plus office that pays your JSA.

You can find your nearest office by using its online branch locator.

PIP and DLA

You have to tell the DWP if you are on Personal Independence payments (PIP) Or Disability Living Allowance (DLA) and going away for more than four weeks.

You have to tell the Government the date you are leaving the country, how long you are going away for and which country you plan to visit.

You also need to tell the DWP why you plan to go abroad.

You can call the Disability Service Centre on 0800 121 4433 to inform them you are going away if you are on PIP or DLA.

Attendance Allowance

Like with PIP and DLA, you have to tell the DWP if you plan to go abroad for more than four weeks and are on AA.

You can claim AA for up to 13 weeks while abroad, or 26 weeks if you’re going away for medical treatment.

Carer’s Allowance

If you are on Carer’s Allowance, you can go away for up to four weeks over a six-month period while still receiving the benefit.

But you still have to report this or risk having to pay back your entitlement or paying a fine.

You can report going away via the Government’s website or by calling the Carer’s Allowance Unit on 0800 731 0297.

Pension Credit

You can claim Pension Credit for up to four weeks if you are abroad.

This is extended to eight weeks if the absence is due to the death of your partner or a child.

However, you still need to report going abroad.

You can do this via the Government’s website or by calling the Pension Credit helpline on 0800 731 0469.

Housing Benefit

You can usually only carry on claiming Housing Benefit for up to four weeks if you go abroad.

Like with Pension Credit, you can carry on receiving it for eight weeks if you have to go abroad because a close relative has died.

But you should contact the Benefits Service on 020 7364 5000 to let them know you’re going away.

You might also be able to via your local council’s website. You can find your local council by using the Government’s online locator tool.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

STRUGGLING households have just days left to apply for extra cost of living payments worth up to £1,000.

The cash is part of the Household Support Fund, which is a £742million fund distributed by councils in England.

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Local authorities have until March 31, 2026, to allocate their share of the fund and can set their own eligibility criteria.

Some councils have already starting distributing their share through cash bank transfers and vouchers while some are yet to.

Residents in Portsmouth in financial hardship and who are struggling to afford essentials can apply for an exceptional hardship payment worth up to £1,000.

Those on Universal Credit and other benefits can apply but you don’t need to be.

However, the city is closing applications at 12 noon on June 12 so you’ll need to move quickly.

Applications may also close early if the funds have been used up.

You’ll need to provide evidence of your income and bank accounts.

You also need to tell what you’ve done to improve your financial situation and why you need help.

The exact amount you receive depends on household size -the maximum amount is for six or more of £800.

Whereas one person gets £350, two people £420, three people £500, four people 600, and five people £700.

Households deemed to be in the highest level of need can be awarded a further £200 taking total payments up to £1,000.

To apply, visit the portsmouth.gov.uk website.

Can I get help if I live outside Portsmouth?

Most likely, yes. However, it will depend on your circumstances and where you live.

For example, the City of Doncaster Council is giving out up to £300 payments to families on Universal Credit.

While households in Middlesbrough can get vouchers worth up to £120.

The Household Support Fund was set up to help households cover essentials such as energy or water bills and food costs.

But, each council can set its own eligibility criteria meaning whether you qualify for help is a postcode lottery.

That said, funding is aimed at anyone who’s vulnerable or struggling to pay for essentials.

So, if you are financially hard-up or on benefits, it is likely you will be able to get help.

It’s worth bearing in mind, any help you receive via the Household Support Fund won’t affect your benefit payments.

The type of help on offer varies from supermarket vouchers to direct cash payments into your bank account.

Some councils are allocating their share of the fund to community groups and charities who you have to get in touch with.

If you’re on benefits, have limited savings, or are struggling to cover food and energy bills, it’s worth seeing if you’re eligible for help.

Contact your local council and see if you have to apply or whether support is being distributed automatically.

You can find what council area you fall under by using the government’s council locator tool – www.gov.uk/find-local-council.

The California Public Utilities Commission failed to abide by state law when it slashed financial incentives for residential rooftop solar panels in 2022, environmental groups argued before the California Supreme Court Wednesday.

The commission’s policy, which took effect in April 2023, cut the value of the credits that panel owners receive for sending power they don’t need to the electric grid by as much as 80%.

In arguments before the court, the environmental groups said the decision has stymied efforts to get homeowners and businesses to install the climate-friendly panels.

The commission violated state law, the groups argued, by not considering all the benefits of the solar panels in its decision and by not ensuring that rooftop solar systems could continue to expand in disadvantaged communities.

More than two million solar systems sit on the roofs of homes, businesses and schools in California — more than any other state. Environmentalists say that number must increase if the state is to meet its goal set by a 2018 law of using only carbon-free energy by 2045.

On the other side of the courtroom battle were lawyers from Attorney General Rob Bonta’s office, arguing that the commission’s five members, all pointed by Gov. Gavin Newsom, had followed the law in making their decision.

In briefs filed before Wednesday’s oral arguments, the government lawyers sided with those from the state’s three big for-profit electric utilities — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric.

Mica Moore, deputy solicitor general, said at the hearing in downtown Los Angles that the credits given to the rooftop panel owners on their electric bill have become so valuable that they were resulting in “a cost shift” of billions of dollars to those who do not own the panels. This was raising electric bills, she said, especially hurting low-income electric customers.

The credits for the energy sent by the rooftop systems to the grid are valued at the retail rate for electricity, which has risen fast as the commissioners have voted in recent years to approve rate increases the utilities have requested.

The environmental groups and other critics of the commission’s decision have argued that there is no “cost shift.” They say that the commission failed to consider in its calculations the many benefits of the rooftop solar panels, including how they lower the amount of transmission lines and other infrastructure the utilities need to build.

“The cost shift narrative is a red herring,” argued plaintiff’s attorney Malinda Dickenson, representing the Center for Biological Diversity, the Environmental Working Group and the Protect Our Communities Foundation.

Moore countered by saying the commission doesn’t have to consider all the possible societal or private benefits of the rooftop panels.

For example, even though the rooftop panels could result in conserving land that was otherwise needed for industrial scale solar farms, the government lawyers argued in their brief, the commission was not obligated to consider that value in its calculation of the amount of costs the rooftop panels shift to other customers.

The government lawyers also said the commission had created other programs beyond the electric bill credits to help disadvantaged communities afford the solar systems.

The utilities have long complained that electric bills have been rising because owners of the rooftop solar panels are not paying their fair share of the fixed costs required to maintain the electric grid.

During the oral arguments, the seven justices focused on a legal question of whether a state appeals court erred when it ruled in January 2024 against the environmental groups and said that the court must defer to how the commission interpreted the law because it had more expertise in utility matters.

“This deferential standard of review leaves no basis for faulting the Commission’s work,” the appeals court concluded in its opinion.

The environmental groups argue the appeals court ignored a 1998 law that said the commission’s decisions should be held to the same standard of court review as those by other state agencies.

Moore told the seven justices that the appeals court had made the correct decision to defer to the commission.

Not all justices seemed to agree with that.

“But we’re pretty good about figuring out what the law says,” Associate Justice Carol Corrigan said to Moore during the proceeding. “Why should we defer on that to the commission?”

The justices will weigh the arguments made by both sides and issue a decision in the next 90 days.

The big utilities have for decades tried to reduce the energy credits aimed at incentivizing Californians to invest in the solar panel systems that can cost tens of thousands of dollars. The rooftop systems have cut into the utilities’ sale of electricity.

On another front, the state’s three big utilities are now lobbying in Sacramento to reduce credits for Californians who installed their panels before April 15, 2023. The commission’s decision in 2022 left the incentives in place for those panel owners for 20 years after their purchase.

Early this year, Assemblywoman Lisa Calderon (D-Whittier), a former Southern California Edison executive, introduced a bill that would have ended the program for all solar owners who installed their systems by April 2023 after 10 years. In face of opposition and protests by solar owners, Calderon amended the bill so it would end the program — where credits are valued at the retail electric rate — only for those selling their homes.

Calderon said the bill would save the state’s electric customers $2.5 billion over the next 18 years.

On Monday, Roderick Brewer, an Edison lobbyist, sent an email to Assemblymembers, urging them to vote for the bill known as AB 942. “Save Electricity Customers Billions, Promote Equity,” he urged in the email.

The Assembly voted 46 to 14 to approve the bill on Tuesday night, sending it to the state Senate for consideration.

The timing of the vote surprised opponents of the bill. They expected a vote late this week because of rules that allow more time for bills to be reviewed after they are amended. Calderon amended the bill late Monday.

Nick Miller, a spokesman for Assembly Speaker Robert Rivas, said Calderon had asked for a waiver of the rules so that it could be voted on Tuesday night.

Such waivers, Miller said, are “not uncommon.”

WEST POINT, N.Y. — President Trump used the first military commencement address of his second term Saturday to congratulate West Point cadets on their academic and physical accomplishments while veering sharply into politics, claiming credit for America’s military might while boasting about his election victory last fall.

“In a few moments, you’ll become graduates of the most elite and storied military academy in human history,” Trump said at the ceremony at Michie Stadium. “And you will become officers of the greatest and most powerful army the world has ever known. And I know, because I rebuilt that army, and I rebuilt the military. And we rebuilt it like nobody has ever rebuilt it before in my first term.”

Wearing a red “Make America Great Again” hat, the Republican president told the 1,002 graduating cadets that the U.S. is the “hottest country in the world,” boasted of his administration’s record and underscored an “America first” theme for the U.S. military, which he called “the greatest fighting force in the history of the world.”

“We’re getting rid of distractions and we’re focusing our military on its core mission: crushing America’s adversaries, killing America’s enemies and defending our great American flag like it has never been defended before,” Trump said. He later said that “the job of the U.S. armed forces is not to host drag shows or transform foreign cultures,” a reference to drag shows on military bases that the Biden administration halted after Republican criticism.

Trump said the cadets were graduating at a “defining moment” in the Army’s history, as he criticized past political leaders, whom he said led soldiers into “nation-building crusades to nations that wanted nothing to do with us.” He said he was clearing the military of transgender ideas, “critical race theory” and trainings he called divisive and political.

“They subjected the armed forces to all manner of social projects and political causes while leaving our borders undefended and depleting our arsenals to fight other countries’ wars,” he said of past administrations.

Several points during his address at the football stadium on the military academy’s campus were indistinguishable from a political speech. Trump claimed that when he left the White House in 2021, “we had no wars, we had no problems, we had nothing but success, we had the most incredible economy” — although voters had just rejected his bid for reelection.

Turning to last year’s election, he noted that he won all seven swing states, arguing that those results gave him a “great mandate” and “it gives us the right to do what we want to do,” although he did not win a majority of votes nationwide.

The president also took several moments to acknowledge specific graduates’ achievements. He summoned Chris Verdugo onto the stage, noting that the cadet completed an 18.5-mile march on a freezing night in January in two hours and 30 minutes. Trump had the top-ranking lacrosse team stand to be recognized. He also brought West Point’s football quarterback, Bryson Daily, to the lectern, praising him as having a “steel”-like shoulder. He later used Daily as an example to make a case against transgender women participating in women’s athletics.

In a nod to presidential tradition, Trump also pardoned about half a dozen cadets who had faced disciplinary infractions.

“You could have done anything you wanted, you could have gone anywhere,” Trump told the class, later continuing: “Writing your own ticket to top jobs on Wall Street or Silicon Valley wouldn’t be bad, but I think what you’re doing is better.”

The president also ran through several pieces of advice for the graduating cadets, urging them to do what they love, think big, work hard, hold onto their culture, keep faith in America and take risks.

“This is a time of incredible change and we do not need an officer corps of careerists and yes men,” Trump said, going on to note recent advances in military technology. “We need patriots with guts and vision and backbone.”

Trump closed his speech by calling on the graduating cadets to “never ever give up,” then said he was leaving to deal with matters involving Russia and China.

“We’re going to keep winning, this country’s going to keep winning, and with you, the job is easy,” he said.

Just outside campus, about three dozen protesters gathered before the ceremony, waving miniature American flags. One in the crowd carried a sign that said “Support Our Veterans” and “Stop the Cuts,” while others held up plastic buckets with the message: “Go Army Beat Fascism.”

Trump gave the commencement address at West Point in 2020, during the height of the COVID-19 pandemic. He urged the graduating cadets to “never forget” the soldiers who fought a war over slavery during his remarks that day, which came as the nation was reckoning with its history on race after the police murder of George Floyd in Minneapolis.

The ceremony five years ago drew scrutiny because the U.S. Military Academy forced the graduating cadets, who had been home because of COVID-19, to return to an area near a pandemic hot spot.

Trump traveled to Tuscaloosa, Ala., earlier this month to speak to the University of Alabama’s graduating class. His remarks mixed standard commencement fare and advice with political attacks against his Democratic predecessor, President Biden, musings about transgender athletes and lies about the 2020 election.

On Friday, Vice President JD Vance spoke to the graduating class at the U.S. Naval Academy in Annapolis, Md. Vance said in his remarks that Trump is working to ensure U.S. soldiers are deployed with clear goals, rather than “undefined missions” and “open-ended conflicts.”

Kim and Swenson write for the Associated Press and reported from West Point and Bridgewater, N.J., respectively.

America’s debt-addicted government just lost its triple-A credit rating from Moody’s, as it previously had from fellow rating agencies S&P and Fitch. Many in Washington shrugged the move off as minor or as unfair treatment of the Trump administration. The truth is more sobering: a flashing red signal that the United States is no longer seen as a “perfect” credit risk and that politicians should stop pretending economic growth alone can bail us out.

Yes, the mess is real, and it’s because habitual deficit financing — the very disease fiscally minded founding father Alexander Hamilton warned against — has become business as usual.

The reckoning comes as House Republicans push to extend the 2017 Trump tax cuts with a “big, beautiful bill.” If handled correctly, it’s a good idea. But while the legislation aims to avoid tax hikes, it pairs modestly pro-growth provisions with a smorgasbord of costly special-interest giveaways. Worse, it assumes we can afford yet another $3 trillion to $5 trillion in debt without serious consequences. That’s the kind of magical thinking that spurred the credit downgrade.

Starting with Hamilton, American politicians long understood the importance of fiscal policy guided by the ethos of balanced budgets, low taxes and steady debt reduction. Their vision, combined with a deep respect for contractual repayment and financial responsibility, made America a creditor nation.

Washington abandoned that honorable legacy in recent decades. U.S. national debt held by the public is racing toward $30 trillion, and the cost of servicing it is ballooning. Interest payments are now one of the fastest-growing parts of the budget — $1 trillion in 2026 — crowding out core priorities and leaving us vulnerable to economic shocks. The Congressional Budget Office warns that even modest interest-rate increases could lead to hundreds of billions of dollars in added annual costs. It’s not a theoretical problem; it’s a real, compounding threat.

Which brings us back to the downgrade. Historically, downgrades like those from S&P in 2011 or Fitch in 2023 haven’t caused immediate crises, but they do raise borrowing costs and gradually erode investor confidence. The downgrades are not the problem, but symptoms of a deeper illness: lack of credible fiscal discipline. Market participants aren’t worried because Moody’s wrote a negative report; they’re worried because what Moody’s wrote is true.

If our political class continues to ignore warnings, the market will do what rating agencies only hint at: impose real discipline through higher borrowing costs, weaker currency demand and tighter credit conditions. Already, China and other countries have reduced holdings of U.S. Treasuries from 42% in 2019 to 30% today.

Meanwhile, the tax plan so far embodies Washington’s worst habits. It makes only temporary the most important pro-growth provisions of the 2017 tax cuts — like full expensing for equipment and research and development — while rendering permanent a raft of unrelated policies catering to favored industries and constituencies. That’s not tax reform; it’s pork-barrel politics dressed up as populist economics.

Worse still, the bill’s Republican supporters in the House justify it with the fantastical claim that it’s fiscally responsible based on the notion that it will raise trillions in growth-generated revenue. Even the most optimistic models show the current bill barely moving the growth needle. The administration claims growth will be enormous once it deregulates and sells off assets, but these distinct policies take a long time to bear fruit.

What a missed opportunity. According to Tax Foundation experts, making just four cost-recovery provisions permanent — bonus depreciation, R&D expensing, full expensing for factories and reforming the business-interest limitation — would more than double the tax bill’s long-run growth benefits.

That’s where legislators should be focused. Not on tax breaks for hand-picked industries or energy credits for hand-picked technologies — on structural reforms that maximize American investment, innovation and capital formation. Even such pro-growth tax policy must be paired with real spending restraint, something we haven’t seen in earnest since the 1990s. Otherwise, any gains from better tax policy will have red ink spilled all over them.

The lesson from Moody’s, and from history, is that America cannot borrow its way to prosperity. That was Treasury Secretary Andrew Mellon’s view in the 1920s, and it remains true today. Mellon quietly prepared for debt defaults by building budget surpluses, knowing that while international repayments might fail, American citizens still had to be paid. That was back when Treasury secretaries respected taxpayers.

Now, as then, we stand at a crossroads. Will we restore Hamiltonian principles of fiscal prudence or continue down a path where downgrades become defaults and our creditors decide the terms of American fiscal policy? The next move belongs to Congress. Legislators can’t say they weren’t warned. If they fail the fiscal prudence test again, we’ll all pay the price.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.

THOUSANDS of households on Universal Credit will continue getting a huge pay rise in the coming days.

Benefit payment rates rose by 1.7% on April 7, in line with the consumer price index (CPI) level of inflation for September 2024.

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It’s important to note that, although the new rates are now in effect, most people won’t see an increase in their payments until later this month or in June.

This is because those on Universal Credit have to wait a bit longer to receive the uprating because of how the benefit is assessed.

It means that the date you’ll receive the pay boost will depend on when your last assessment period was.

Universal Credit is paid monthly and is based on your circumstances each month.

This is called your “assessment period”, and it starts the day you make your claim.

The new Universal Credit rates will not come into effect until after the first full one-month assessment period, which starts on or after April 7.

Those whose assessment periods started after April 7 saw their benefits rise as early as May 13.

However, those whose assessment periods started before this date could be waiting until June 12 to receive the payment boost.

Here’s how your previous assessment period affects when you’ll get the payment boost:

• March 17 to April 16 – increase applied in May, you’ll get it in your payment on May 21
• March 18 to April 17 – increase applied in May, you’ll get it in your payment on May 22
• March 19 to April 18 – increase applied in May, you’ll get it in your payment on May 23
• March 20 to April 19 – increase applied in May, you’ll get it in your payment on May 24
• March 21 to April 20 – increase applied in May, you’ll get it in your payment on May 25
• March 22 to April 21 – increase applied in May, you’ll get it in your payment on May 26
• March 23 to April 22 – increase applied in May, you’ll get it in your payment on May 27
• March 24 to April 23 – increase applied in May, you’ll get it in your payment on May 28
• March 25 to April 24 – increase applied in May, you’ll get it in your payment on May 29
• March 26 to April 25 – increase applied in May, you’ll get it in your payment on May 30
• March 27 to April 26 – increase applied in May, you’ll get it in your payment on May 31
• March 28 to April 27 – increase applied in June, you’ll get it in your payment on June 1
• March 29 to April 28 – increase applied in June, you’ll get it in your payment on June 2
• March 30 to April 29 – increase applied in June, you’ll get it in your payment on June 5
• March 31 to April 30 – increase applied in June, you’ll get it in your payment on June 6
• April 1 to April 31 – increase applied in June, you’ll get it in your payment on June 7
• April 2 to May 1 – increase applied in June, you’ll get it in your payment on June 8
• April 3 to May 2 – increase applied in June, you’ll get it in your payment on June 9
• April 4 to May 3 – increase applied in June, you’ll get it in your payment on June 10
• April 5 to May 4 – increase applied in June, you’ll get it in your payment on June 11
• April 6 to May 5 – increase applied in June, you’ll get it in your payment on June 12

Here’s a full list of the new benefit rates for 2025-26 so you can check how much extra you might get.

Universal Credit

Universal Credit standard allowance (monthly)

• Single, under 25: £316.98 (up from £311.68)
• Single, 25 or over: £400.14 (up from £393.45)
• Joint claimants both under 25: £497.55 (up from £489.23)
• Joint claimants, one or both 25+: £628.10 (up from £617.60)

Extra amounts for children

• First child (born before April 6, 2017): £339 (up from £333.33)
• Child born after April 6, 2017 or subsequent children: £292.81 (up from £287.92)
• Disabled child (lower rate): £158.76 (up from £156.11)
• Disabled child (higher rate): £495.87 (up from £487.58)

Extra for limited capability for work

• Limited capability: £158.76 (up from £156.11)
• Work-related activity: £423.27 (up from £416.19)

Carer’s element

• Caring for a severely disabled person at least 35 hours a week: £201.68 (up from £198.31)

Work allowance increases

• Higher work allowance (no housing): £684 (up from £673)
• Lower work allowance (with housing): £411 (up from £404)

Everything you need to know about Universal Credit

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Following a broad weekly rally on Wall Street amid a de-escalation in the US-China trade war, risk-off sentiment once again prevailed in global markets following a major downgrade of US credit ratings by Moody’s. Global equity indices fell during Monday’s Asian session as sell-offs in US assets resumed, with US stock futures, the dollar, and government bonds all declining.

Moody’s downgrades US credit ratings

On Friday, Moody’s Ratings, a major American credit rating agency, downgraded the “US long-term issuer and senior unsecured ratings” to Aa1 from the top-tier Aaa due to mounting concerns over rising government debt and widening fiscal deficits.

The agency stated: “Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues. As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly.”

Moody’s downgrade followed similar moves by rival agencies: Standard & Poor’s cut its US sovereign credit rating to AA+ in 2011, and Fitch Ratings made the same downgrade in 2023.

The decision led to a rise in US government bond yields as investors demanded a higher premium to compensate for perceived risks. The 10-year Treasury yield rose by 5 basis points (1 basis point = 0.01 percentage point) to 4.48% on Friday, climbing further to 4.51% during Monday’s Asian session. The downgrade also appeared to dampen investor appetite for other US assets, including equities and the dollar.

Moody’s expects federal budget flexibility to remain “limited” without adjustments to taxation and government spending. The agency projected that the US deficit would expand by approximately $4 trillion (€3.58 trillion) over the next decade if the 2017 Tax Cuts and Jobs Act is extended. “Federal interest payments are likely to absorb around 30% of revenue by 2035, up from about 18% in 2024 and 9% in 2021,” Moody’s added.

“It does speak to a level of market risk in US debt, which is to say that the value of US bonds could be compromised if the economy can no longer run at the growth rates necessary to service the government’s liabilities,” Kyle Rodda, senior market analyst at Capital.com in Australia, said.

Risk-off sentiment prevails

US equity futures fell sharply during Monday’s Asian session following Moody’s downgrade. As of 4:42 am CEST, futures on the Dow Jones Industrial Average were down 0.65%, the S&P 500 dropped 0.92%, and the Nasdaq Composite declined by 1.22%.

Asian equities also came under pressure amid the risk-off tone. Japan’s Nikkei 225 dropped 0.66%, Australia’s ASX 200 declined 0.46%, and Hong Kong’s Hang Seng Index slid 0.56% during the same period.

The ripple effect is expected to spill into European markets, though major indices such as the Euro Stoxx 600 and the DAX were set to open flat.

The US dollar also weakened against other G10 currencies, particularly safe-haven currencies including the euro, the Japanese yen, and the Swiss franc. Gold prices rose amid increased haven demand, although the yellow metal pulled back from an intraday high, likely due to pressure from rising US bond yields. Gold futures initially surged over 1% before retreating and were 0.8% higher, trading at $3,213 per ounce as of 4:12 am CEST.

Despite market jitters, Rodda believes the impact of Moody’s move will be short-lived. “I don’t think it will have a lasting impact,” he said, although he views the downgrade as “a reminder of the very loose fiscal policy the US is running and the structural problems related to US public finance.”

May 17 (UPI) — Moody’s Ratings downgraded U.S. debt, becoming the last of the three major credit rating agencies to move in that direction.

The New York-based agency downgraded government long-term issuer and senior unsecured ratings to Aa1 from Aaa this week, while also changing its outlook to negative from a previous rating of stable, Moody’s said in a media release.

“This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” Moody’s said in the company’s statement.

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

Standard & Poor’s in 2011 became the first of the three nationally recognized statistical rating organizations to lower its U.S. debt rating. It later accused the Justice Department of “retaliation” for filing a $5-billion lawsuit against the credit rating agency.

Fitch Ratings followed in 2021, dropping its American long-term foreign-currency issuer default rating from top-ranked AAA to AA+ amid a political battle over the U.S. debt ceiling. That move elicited then-Treasury Secretary Janet Yellen to blast the move at the time, calling it “unwarranted.”

Moody’s in 2023 signaled it could move in the same direction, putting U.S. banks on a negative watch list and warning of a ‘mild’ recession, and later that year lowering its outlook of U.S. debt.

The agency in November then warned of a potential downgrade.

“Over more than a decade, U.S. federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues. As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly,” Moody’s said in its statement this week.

“If the 2017 Tax Cuts and Jobs Act is extended, which is our base case, it will add around $4 trillion to the federal fiscal primary deficit over the next decade. While we recognize the U.S.’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics.”

The White House attempted to shift the blame to former President Joe Biden‘s administration.

“The Trump administration and Republicans are focused on fixing Biden’s mess by slashing the waste, fraud, and abuse in government and passing The One, Big, Beautiful Bill to get our house back in order,” White House spokesperson Kush Desai told reporters Friday.

“If Moody’s had any credibility, they would not have stayed silent as the fiscal disaster of the past four years unfolded.”

Moody’s said it does not expect further downgrades in the near future.

“The U.S. economy is unique among the sovereigns we rate. It combines very large scale, high average incomes, strong growth potential and a track-record of innovation that supports productivity and GDP growth. While GDP growth is likely to slow in the short term as the economy adjusts to higher tariffs, we do not expect that the US’ long-term growth will be significantly affected,” the agency said in its statement.

Moody’s cited rising debt, saying US had repeatedly failed to end the trend of large annual fiscal deficits and interest.

Moody’s Ratings has stripped the United States government of its top credit rating, citing successive governments’ failure to stop a rising tide of debt.

On Friday, Moody’s lowered the rating from a gold-standard Aaa to Aa1. “Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” it said as it changed its outlook on the US to “stable” from “negative”.

But, it added, the US “retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency.”

Moody’s is the last of the three major rating agencies to lower the federal government’s credit rating. Standard & Poor’s downgraded federal debt in 2011, and Fitch Ratings followed in 2023.

In a statement, Moody’s said: “We expect federal deficits to widen, reaching nearly 9 percent of [the US economy] by 2035, up from 6.4 percent in 2024, driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.’’

Extending President Donald Trump’s 2017 tax cuts, a priority of the Republican-controlled Congress, Moody’s said, would add $4 trillion over the next decade to the federal primary deficit, which does not include interest payments.

The White House adopted an aggressive tone towards Moody’s after the ratings agency downgraded the US credit rating.

White House communications director Steven Cheung reacted to the downgrade via a social media post, singling out Moody’s economist, Mark Zandi, for criticism. He called Zandi a political opponent of Trump.

“Nobody takes his ‘analysis’ seriously. He has been proven wrong time and time again,” Cheung said.

A gridlocked political system has been unable to tackle the huge deficits accumulated by the US. Republicans reject tax increases, and Democrats are reluctant to cut spending.

On Friday, House Republicans failed to push a big package of tax breaks and spending cuts through the Budget Committee. A small group of hard-right Republican lawmakers, insisting on steeper cuts to Medicaid and President Joe Biden’s green energy tax breaks, joined all Democrats in opposing it, a rare political setback for the Republican president.

SIR Keir Starmer yesterday told Labour rebels to fall into line over welfare cuts – as more than 100 of his own MPs are demanding a U-turn.

The PM insisted the system is “not working for anybody” and vowed to press ahead with slashing the health element of Universal Credit and tightening disability benefit rules.

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Asked if he would soften the package, he said: “The argument for reform is overwhelming and that’s why we will get on and we will reform.”

It comes as furious MPs are urging him to delay the cuts and have slammed the lack of proper impact checks. 

In a blistering letter to the Chief Whip, they said: “We regret we are unable to support a Bill before this has taken place.”

If all the MPs who have signed the letter follow through and vote against the plans, it could wipe out Sir Keir’s majority and trigger the biggest rebellion of his leadership.

Such is the worry inside Labour, that a party source warned dissenting MPs they could be punished at the ballot box.

The source said: “There is only going to be so much money, time and resources at the next election. 

“How people behave now will make a difference to how those resources are allocated.”

It comes as some furious MPs are poised to rebel against Sir Keir because they think they’re toast at the next election.

Moderate backbenchers who have so far towed the party line are mulling taking a public stand on issues including disability benefit cuts, immigration and winter fuel payments – even if it means losing the whip.

There is also growing anger around the two-child benefit cap still being in place.

The Sun understands some MPs want to work “with a clear conscience” until the end of this parliament – knowing that they are unlikely to return because of the threat of Reform.

A Red Wall Labour MP said: “Multiple colleagues with slim majorities think they have no chance of winning their seat.

“They want to hold the PM to account on issues causing an uproar locally, including PIP payments, and think they have nothing to lose if they defy party whips going forward.”

Another Labour MP told The Sun: “The numbers willing to rebel are much higher than expected.

“I think people shouldn’t underestimate just how much welfare is a driver of why a lot of Labour MPs, particularly moderates, are in the Labour party in the first place.

“A lot of our politics was defined by the performative cruelty of the Osborne era, and that casts a long shadow.”

Over 150,000 on benefits will see their payments cut under Personal Independence Payments (PIP) changes, the DWP has confirmed.

The Government is shaking up the way PIP is assessed meaning hundreds of thousands will miss out from November 2026.

From late next year, new and existing PIP claimants being reassessed will have to score a minimum of four points in at least one activity to receive the Daily Living Component.

It will see those unable to cook qualify, but not those who can use a microwave.

Likewise, assistance required to wash your lower body would not deem you eligible but your upper body would.

And, while requiring help to use the toilet meets the threshold, needing reminded to go would fall below it.

The higher rate of the Daily Living Component is currently worth £110.40 a week.

Claimants will also have to score at least eight points when being assessed.

The Government estimates this means by 2029/30 around 800,000 won’t receive the Daily Living Component of PIP.

But it has also confirmed 150,000 will be missing out on Carer’s Allowance or the Universal Credit Carer’s Element by 2029/30 too.

This is because to receive either of these carer’s benefits you have to be caring for someone who receives the Daily Living part of PIP.

It means new and existing PIP claimants finding they are no longer eligible will disqualify their carer’s from next November when the changes kick in.