Key Takeaway: Moody's downgraded Southern Water to junk status , citing financial and operational underperformance, compounding the broader issues facing the UK water sector. Southern Water Ltd’s credit rating was downgraded to junk by Moody’s , with a warning of potential further cuts due to its weak performance history and financial challenges. This downgrade impacts the company’s ability to raise the £4 billion in new debt and £650 million in equity required for its capital plans. The UK water industry is facing heightened scrutiny due to concerns over chronic leaks, sewage spills, and high-interest rates. Southern Water, which supplies over two million people in England, could face severe penalties from the regulator Ofwat , which may limit funds for essential upgrades. Following the downgrade, Southern Water’s 2026 bonds dropped 2.7 pence to around 85 pence on the pound. Despite the rating cut, Southern Water assured customers that services would continue unaffected, hig
Key Takeaway: Trump’s sweeping tax cut agenda for businesses, workers, and retirees will test Republicans' commitment to controlling the national debt, now at $35 trillion.
With a new Republican majority in Congress, President-elect Donald Trump plans to extend his 2017 tax cuts, eliminate several federal agencies, and slash unspent Democratic funds. Early priorities include funding for a US-Mexico border wall and targeting the Department of Education and Consumer Financial Protection Bureau.
However, Trump's proposed tax cuts could add $7.5 trillion to the national debt over the next decade, straining a deficit that already exceeded $1.83 trillion in fiscal 2024. A recent poll shows that 62% of Americans expect Trump’s policies to drive the debt higher.
Republicans may use budget reconciliation to bypass the Senate's filibuster rule, although hardline conservatives like Senator Ron Johnson insist on offsetting spending cuts for entitlement programs such as Social Security and Medicare. The Committee for a Responsible Federal Budget estimates that Trump’s campaign tax proposals could significantly impact the debt if passed.
Challenges Ahead:
The Republican-controlled Congress must first pass a 2025 budget resolution in January to enable reconciliation, while Trump’s influence over the party is expected to streamline his agenda. The limited scope of reconciliation could leave out non-budget priorities, like border policies and cultural issues, potentially sparking intra-party conflicts.
In response to debt concerns, Republicans argue that economic growth and spending cuts could offset revenue losses, with plans to cut $1 trillion from the Inflation Reduction Act. Trump's influence over his party is likely to grow stronger in the coming term, as he pressures Republicans to deliver on his ambitious agenda.
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