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Feb. 23, 2013 at 10:55 AM   |   Comments

Moody's downgrades Britain from AAA to Aa1

LONDON, Feb. 23 (UPI) -- U.S. rating agency Moody's Friday downgraded its rating of British bonds from AAA to Aa1, sparking criticism from the Labor Party over economic policies.

Chancellor of the Exchequer George Osborne said the downgrade will not change the coalition government's economic policy, The Daily Telegraph reported. But Shadow Chancellor Ed Balls called the downgrade an indictment of current economic policies.

"This credit rating downgrade is a humiliating blow to a prime minister and chancellor who said keeping our AAA rating was the test of their economic and political credibility," Balls said.

"But what matters is the underlying economic reality and what has happened is the credit rating agencies have caught up with the facts.," the British Broadcasting Corporation quoted Balls as saying.

Criticism came from other corners, as well. "The decision to downgrade the UK's credit rating confirms the utter failure of the UK government's economic strategy," said Scottish finance secretary John Swinney.

Moody's predicted the British economy will "remain sluggish over the next few years." The agency said Britain's deficit will remain high at least through the next three years.

But Moody's also said the country's "creditworthiness remains extremely strong."


NHTSA limping along, some say

WASHINGTON, Feb. 23 (UPI) -- Americans may be driving unsafe vehicles without knowing it because federal safety investigations are taking longer than they should, consumer advocates say.

Joan Claybrook, former head of the National Highway Traffic Safety Administration, said a safety investigation into 2002-05 Ford Explorers and Mercury Mountaineers took 42 months and an investigation of 1999-2003 General Motors full-size pickups has gone on for 25 months -- well over the agency guideline of 12 months -- The New York Times reported Saturday.

Clarence Ditlow, executive director of the Center for Auto Safety, said the NHTSA division that investigates defects and oversees recalls "is on a starvation diet," the newspaper reported.

The NHTSA budget of about $800 million includes $10.6 million for the Office of Defect Investigation, which has 28 investigating engineers on its payroll, two more than it had in 2001, the Times said.

NHTSA Director David Strickland noted the agency initiated 134 recalls in 2012, affecting 9 million vehicles.

"Clearly we are able to succeed in executing our mission and doing it very well with the staff on hand and the expertise that we have on hand," Strickland said.

Ditlow said NHTSA claims of success are exaggerated, since one investigation can trigger multiple recalls.

"The historic rule at NHTSA is one investigation, one recall," Ditlow said. "Anything else is recall inflation."

The Times said one investigation into Webasto sunroofs prompted 61 recalls in 2011, accounting for almost half of the 131 recalls the NHTSA reported for the year.


AOA says rules impede Chinese tourism

LONDON, Feb. 23 (UPI) -- Airport operators in Britain said a substantial portion of revenue is lost due to a cumbersome visa system required for Chinese nationals.

In a letter to British authorities, including Chancellor of the Exchequer George Osborne, the Airport Operators Association said a revenue reduction of $1.8 billion is due to Chinese tourists who choose to go elsewhere to avoid an expensive and burdensome British system for obtaining visas.

Chinese nationals must pay a relatively high fee, have their fingerprints taken and fill out an extensive application form to visit Britain, The Daily Telegraph reported Saturday.

"A key cause of this unwillingness to travel here is our visa system, which people view as expensive, cumbersome and bureaucratic," said AOA Chief Executive Officer Darren Caplan.

The problem is all the more acute because Chinese tourists spend an average of $2,421 per person while visiting Britain, "at least twice that of any other visiting nation," Caplan said.

Airport operators said spending at airport shops represented a third of their non-aeronautical revenue each year. They also said fewer than 200,000 Chinese tourists visited Britain in 2011.

They urged authorities to simplify the visa process.

"Any increase in the number of visits the Chinese make to Britain would benefit this vibrant retail sector and the employment it generates," said Sarah Branquinho, chairwoman of the UK Travel Retail Forum.


Turkey drops road privatization plan

ISTANBUL, Turkey, Feb. 23 (UPI) -- Turkey's Finance Ministry says it has dropped plans to privatize toll roads after Prime Minister Recep Tayyip Erdogan said a bid of $5.7 billion was too low.

"We will review the privatization offers, for example, for the highways or bridges. We have much bigger expectations," Erdogan said before the decision was announced.

The bid was the second-highest privatization bid in Turkish history, Hurriyet Daily News reported Saturday. It involved privatization of toll roads that included toll collection on suspension bridges over the Istanbul Strait, also known as the Bosphorus.

Turkey's toll roads pulled in $445 million in 2012, the General Directorate of Highways reported in January.

Turkey plans to build a third bridge over the straits.

The plan is to relieve traffic pressure on other bridges and provide better access to an airport being built north of Istanbul.

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