Fitch: UK Budget ‘strong intent’ to keep AAA status
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Fitch Ratings says a delivery of today’s Budget will materially strengthen the UK’s AAA status.
The ratings agency says that the debt reduction strategy outlined today was “materially stronger than that set out in the March 2010 Budget” and says that if the UK Government can deliver the measures, the UK’s AAA will be sustained.
Fitch Head of Sovereign Ratings David Riley says: “Fitch’s preliminary assessment of today’s Budget is that it sets out an ambitious deficit reduction path that, if delivered upon, will materially strengthen confidence in UK public finances and its AAA status.”
But Riley warns that the severity of cuts in public spending may be tough to execute, and may threaten the stability of the UK economy.
He says: “Securing the reductions in ’unprotected’ departmental and welfare spending will be very challenging and the Spending Review announced for October 2010 will be important in detailing and enhancing the credibility of today’s Budget announcements.”
In his Budget today, Chancellor George Osborne said: “The sustainability of sovereign debt is the greatest risk to the recovery of European economies. Questions are now being asked of the liquidity and solvency of some governments. I do not want those questions ever to be asked of this country.”
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