Finance

Home page

Finance

S&P stands firm on Britain’s triple-A rating

28 July 2012 09:09 (UTC +04:00)

Baku â€“ APA-Economics. Ratings agency Standard & Poor’s reaffirmed UK’s coveted ’AAA’ credit rating, but warned it will be at risk should UK economic growth fall short of its expectations, Telegraph reported.

Britain’s coveted ’AAA’ credit rating will be at risk should UK economic growth fall short of its expectations, rating agency Standard & Poor’s has warned.

The warning came as the agency reaffirmed the UK’s top rating and the outlook on that rating as stable. The latter signals that S&P does not expect to make any changes to the rating soon.

After shrinking in the first half of the year, S&P expects UK growth to start recovering in the second half of the year as the debt crisis in Europe stabilises. Figures this week showed that the economy contracted a larger than expected 0.7pc in the second quarter.

While the rating agency expects the UK government to implement its fiscal consolidation plan, it added "we could lower the ratings if the pace and extent of fiscal consolidation slows beyond what we currently expect." It added that a slowing could come from either "a reappraisal of our view of the government’s ability to implement its fiscal strategy or from significantly weaker economic growth than we currently expect."

Although Chancellor George Osborne will welcome the confirmation of Britain’s top rating, he faces pressure both to get the economy expanding again as he sticks to the government’s deficit-reduction plan.