View more on these topics

UK’s AAA credit rating at risk following Autumn Statement

UK Britain Union Jack Bunting 480

The UK’s AAA rating is likely to be downgraded next year after the Office for Budget Responsibility cut its prediction for economic growth, ratings agency Fitch has warned.

The OBR’s new figures showed that even after a five-year parliament of spending cuts and tax rises, the Government will still be borrowing around one in every 10 pounds it spends.

The official growth forecasts increase debt to £105bn in 2016/17, making it impossible for chancellor George Osborne to meet his target to reduce the share of public debt to national income by 2015/16.

Fitch, which put the UK’s AAA status on “negative outlook” in March, said “missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the rating.”

It says: “The OBR now judges that the supplementary target of falling public sector net debt by 2015/16 is likely to be missed. This is consistent with our assessment in September.

“The Government has chosen not to chase the supplementary target by deploying additional consolidation measures over the next two years. In our view, missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the AAA rating. We forecast gross general Government debt to peak at 97 per cent in 2015/16, approaching the upper limit of the level consistent with the UK retaining its AAA status.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com