UK Banks No Longer Ranked Amongst Most Stable

The global standing of the City was dealt a devastating blow today when a leading analyst said Britain's battered banking system could no longer be ranked among the world's most stable.

A damning report from debt rating agency Standard & Poor's sent the pound tumbling almost a cent and a half in the latest blow to Britain's financial status.

Two days ago a leading bond trader said the Government debt market was lying “on a bed of nitroglycerine” because of the parlous state of the public finances.

In its report, Standard & Poor (Standard & Poor's Financial Services LLC) said high levels of debt would continue to hold back the economy, which has only just limped out of recession, and undermine the performance of the banks.

The report said: “We no longer classify the United Kingdom among the most stable and low risk banking systems globally.”

It is another huge setback for the reputation for a financial system once seen as a by-word for financial rectitude that was enshrined in the phrase “as safe as the Bank of England”.