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Moody’s warns slow growth may place UK’s AAA status at risk

The UK’s AAA sovereign debt rating could be downgraded if growth slows to the point that it impacts the Government’s fiscal consolidation, according to ratings agency Moody’s.

During his Budget statement on Wednesday Chancellor George Osborne announced that the Office for Budget Responsibility had revised its growth figures for 2011/12 from 2.1 per cent to 1.7 per cent and from 2.6 per cent to 2.5 per cent for 2012/13.

In a statement Moody’s said: “Although the weaker economic growth prospects in 2011 and 2012 do not directly cast doubt on the UK’s sovereign rating level, we believe slower growth combined with weaker than expected fiscal consolidation could cause the UK’s debt metrics to deteriorate to a point inconsistent with an AAA rating.”

Moody’s downgraded its own forecast for UK growth further than the OBR to 1.6 per cent but the OBR’s forecasts beyond 2012/13 remain at much the same point they were at last November’s economic and fiscal outlook.

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  1. …. I do not say this lightly about any politician but on this one occasion after 40 years of seeing them come and go I now see one of the finest leaders of .. at least, my lifetime in Mr David Cameron.
    Can none of you join up the dots and see for yourselfes where he is heading, it is the most inspiring leadership of the 20th century.
    If I am correct in my assumptions then the next move will be Abbu Dabbi and that big box they are always referring to.
    Trust me we are safe in this mans hands, this is not going to be a smooth ride but the outcome will secure us all for our time here!
    Yrs
    kk

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