HomeBusinessUK credit ratings set to be halved

UK credit ratings set to be halved

The rating agency, Fitch, has warned that it may downgrade the United Kingdom’s credit rating in April.

Reuters

It has put the UK’s long-term rating on Credit Watch Negative, which it said showed “a heightened probability of a downgrade”.

The agency said it was due to higher-than-expected debt levels and downward revisions to UK growth forecasts.

The review follows the budget last week in which UK growth forecasts for 2013 were halved.

The Office for Budget Responsibility cut its growth forecast to 0,6% for 2013, from 1,2% in December.

The pound fell sharply against the dollar after the news from Fitch, dropping half a cent against the dollar. It has since come back to trade at around US$1,5222.

Last month, Moody’s stripped the UK of its top AAA rating, arguing that sluggish growth was making it harder for the government to cut its overspending.

The third big ratings agency S&P also has a AAA rating for the UK, but cut the outlook on that rating to negative last December.

In response to the Fitch announcement, the Treasury said: “This serves to underline that there are no easy answers to problems built up over many years. But we are, slowly but surely, fixing our country’s economic problems.

As the chancellor said at the budget: it’s taking longer than anyone hoped, but we’re on the right track.”

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