S&P affirms “AAA” rating for UK
Rating agency Standard & Poor’s (S&P) today affirmed its “AAA” long-term rating on Britain but maintained its negative outlook on the long-term rating.
Following the news, the pound fell to $1.5017 from $1.5068.
Commenting on its announcement, S&P analysts Trevor Cullinan and David Beers, said: “The coalition government has set out what we view as a strong framework for fiscal consolidation.
“There is still a material risk that the UK’s net general government debt burden may approach a level incompatible with the AAA rating,” the statement added.
In addition, the analysts said: “We will continue to review the rating in light of further information over the coming months about the extent of the expenditure-led fiscal consolidation.
“A number of large and politically challenging spending decisions are still to be made.”
The news comes just hours after the Office for National Statistics (ONS) revealed the UK economy grew by 0.3% in the January to March period – unchanged from the previously estimated figure, but marginally higher than the first estimate of 0.2%.
Analysts had expected GDP to remain unchanged in the first quarter but many economists believe that economic growth will fall back over the latter half of the year as austerity measures kick in – introduced to deal with Britain’s record deficit of £155 billion.