It's business day one of the UK's newly reduced credit rating, AA1 down from the hallowed triple-A that we were all so proud of. At least according to Moody's that is. Standard & Poor's still has the UK at AAA whereas it has the USA at a mere AA+ (their equivalent of AA1.)
The effect so far has been that sterling has fallen less than a penny against the US dollar, the FTSE100 is up 40 points and the UK CDS rate has actually gone down! (This is the Credit Default Swap rate which measures the cost of insuring UK gilts against default. Currently it costs about 0.51% of the capital assured to insure for five years. Contrast that with 0.39% for the USA or 0.81% for France - or 41% for Greece!)
The main reason for the lack of drama on the markets is that S&P is the more significant ratings agency and the main "AAA funds" such as pension funds and other very low risk funds can still point at S&P and say: too soon to panic. These funds will need to sell their UK gilts when (if) S&P also downgrades since their rules force them to hold only AAA paper. The big sell off is yet to come. This blog imagines they are starting the process now though.