Australian Election Losers Could Include Triple-A Rating

Australia could lose its rare triple-A credit rating after a tight general election raised questions about the next government’s ability to curb spending and bring down debt, The Wall Street Journal reported. The election remains too close to call, but the prospect of a lengthy period of political instability—such as a hung parliament in the 150-seat House of Representatives, where governments are formed—complicates Australia’s challenge in revving up an economy hit by the end of a decadelong mining boom. On Monday, Standard & Poor’s Global Ratings said “parliamentary gridlock” could trigger a downgrade if it means Australia’s finances don’t improve. Moody’s Investors Service said its assessment could change if the new parliament led to an undesirable shift in policy. It highlights how politics is increasingly influencing the thinking of ratings companies as signs grow that the global economic recovery is faltering. S&P stripped the U.K. of its pristine triple-A rating within days of the country’s vote to leave the European Union, citing concerns about constitutional and economic integrity. Read more. (Subscription required.)