Triple-A credit rating ‘at risk’
Moody’s keeping a close eye Britain’s economic progress
By CFOWorld.co.uk | CFO UK | Published 11:51, 08 June 11
The UK’s triple-A credit rating would be put at risk if growth in the economy were to slow and fiscal consolidation policies were scaled back, the rating agency Moody’s said on Wednesday.
Doubts have been raised in recent weeks over the feasibility of the government’s aim of almost eliminating a budget deficit of close to 10 percent of GDP in four years as economic growth remains distinctly sluggish.
“Moody's has the UK at a triple-A rating with a stable outlook,” a Moody's spokesman told Reuters.
“However, as we've been saying for a while, in a situation of lower growth combined with weaker than expected fiscal consolidation, we would reconsider our stance,” he added.
Investors took fright earlier on Wednesday after news agency Market News International quoted a Moody's analyst as raising doubts over the outlook for the UK's triple-A rating, causing September gilt futures to plunge by almost half a point.
However, the contract subsequently recovered from most of its losses and analysts said the report stated nothing new and served merely as a reminder of some of the risks ahead.
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