Third agency now ‘negative’ about UK’s credit rating
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Your support makes all the difference.All three main international credit agencies have now put the UK on a “negative outlook”, indicating that the country could lose its AAA rating next year.
Standard & Poor’s said last night there was a one-in-three chance it could lower Britain’s rating within the next two years, if economic conditions weaken. S&P also revised its outlook on the Bank of England’s AAA rating to negative.
Its move follows that of fellow agencies Moody’s and Fitch – which have both revised the UK to negative.
S&P said it expected government debt, as a percentage of gross domestic product (GDP), to continue to rise in 2015 before declining again, with future employment or growth shocks putting further pressure on government finances.
It said it could lower the UK’s rating “if fiscal performance weakens beyond our current expectations”.
A country’s credit rating can influence its borrowing costs, as some investors are restricted from lending to those not on a high rating. However the Government believes the effects of a downgrade on borrowing costs would be limited.
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