Gilts have tumbled on the news that the debt rating agency Standard & Poor’s has just lowered its credit outlook on the U.K. to negative, from stable, in view of the government debt crisis.

S&P has so far kept the Triple “A” rating intact, but the outlook change signals that the the UK’s credit rating could be lowered:

“We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term…”

Note the use of the term “general government debt”. That is because government uses discredited debt definitions to make out that Britain has lower government debt than it really does.  The markets simply don’t believe the government’s figures.

Last October Guido “Asked the PM” via video (creatively using Ms Fawkes’ crayons and sticky backed plastic) about how Gordon added up the national debt:

And he, errm, cheerily trotted out a very disingenuous line:

The markets didn’t believe him and now neither do the ratings agencies…