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Saturday 30th of October 2010
October 26, 2010    

S&P revises its outlook for UK economy

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by Kay Murchie

Credit rating agency Standard and Poor’s (S&P) has today expressed its support for the Coalition Government’s handling of the UK economy after revising its outlook on the UK economy to “stable” from “negative” and affirmed its top AAA credit rating for Britain.

The revision came on the same day that the Office for National Statistics (ONS) revealed UK economic growth for the third quarter slowed to 0.8%, albeit double the rate analysts had forecast.

Today’s figures will reduce the chance of more quantitative easing from the Bank of England in the short-term, according to many, sending the pound up against the dollar and the euro today.

The pound rose 1.68 cents against the dollar to $1.5891 just before midday, while one euro was worth 87.78p, down from 88.84p.

Meanwhile, S&P said today that the Government has “shown a high degree of cohesion in putting the UK’s public finances onto what we view to be a more sustainable footing.”

The Bank of England’s Monetary Policy Committee will hold its rate-setting meeting next week but many analysts expect monetary policy to remain on hold for the short-term since today‘s GDP data weakens the case for more QE.

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