Budget supports Britain's top credit rating: Moody's

23rd June 2010, Comments 0 comments

International ratings agency Moody's said on Wednesday that Britain's austerity budget supported the country's top credit rating.

"Moody's Investors Service today said that the UK budget is supportive of the country's Aaa rating and stable outlook because it is a key step towards reversing the significant deterioration in the government's financial position that occurred over the past two years," the agency said in a statement.

Moody's joins another leading agency, Fitch, in welcoming the new British government's budget plans outlined on Tuesday to slash public spending and raise taxes to bring down Britain's massive public deficit.

Finance minister George Osborne had set out his emergency budget against the backdrop of soaring debt levels in the eurozone and concerns that Britain's top-rated AAA credit rating could be at risk.

Fitch said on Tuesday that Britain's austerity budget should "materially strengthen confidence" in the country's public finances and its top 'AAA' credit status.

Chancellor of the Exchequer Osborne had blamed the dire state of the public finances on the previous Labour government, which left him nursing a downwardly-revised record deficit of 154.7 billion pounds in the 2009-2010 financial year.

Osborne told parliament on Tuesday that the deficit, or public sector net borrowing, would drop to 37 billion pounds by 2014-2015 and to 20 billion pounds by 2015-2016.

© 2010 AFP

0 Comments To This Article