Fitch ready to strip UK of exclusive AAA rating

301ffitch cut  Fitch ready to strip UK of exclusive AAA rating

The measure is said to mirror “the latest economic and fiscalforecasts published by the Office for Budget Responsibility (OBR)that indicate that UK government debt will peak later and at ahigher level than previously expected by Fitch,” the agencyexplained in a statement.Fitch is due to complete its full review by the end of April,taking a final decision over the downgrade.”The persistently weak performance of UK growth, in part due toEuropean growth, has increased uncertainty around the UK’spotential output and longer-term trend rate of growth withsignificant implications for public finances,” Fitch stated,adding however that the UK’s creditworthiness “continued to beunderpinned by its high-income, diversified and flexible economy -underscored by the rise in employment despite the tepid economicrecovery – and the authorities’ commitment to deficitreduction.”Fitch’s warning turned out to be what many described as a “blow” tothe government, given that the economic recovery was supposed to beits biggest concern; Chancellor of the Exchequer George Osborne hadonce promised to do his best to protect the UK’s triple-A creditrating.”Osborne’s plan has catastrophically failed on growth, livingstandards and the deficit,” Labour Finance Ministry SpokesmanChris Leslie said in a statement released by Reuters.In February Moody’s made waves when it expelled Britain from theprivileged AAA exclusive club, which features Germany, Switzerlandand Canada.In December, Standard & Poor’s cut its outlook on Britain’scredit rating down to negative, warning that the UK could lose itsAAA status if the country’s economy weakened further, “beyondexpectations.”According to the independent Office for Budget Responsibility,public debt is set to keep going up until 2016-17, peaking at 85.6per cent of Britain’s annual gross domestic product.In the last three months of 2012 the UK economy shrank by 0.3 percent. A number of analysts have predicted another reduction in thefirst quarter of 2013.

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Fitch ready to strip UK of exclusive AAA rating

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