Ratings agencies affirm British credit rating

7th May 2010, Comments 0 comments

Ratings agencies Moody's and Standard & Poor's said Friday that they were keeping their top-level credit ratings for the British economy despite an unclear result from the general election.

"The outcome of the UK general election does not directly threaten the UK government's Aaa rating," Moody's Investors Service said in a statement, after results showed that no single political party had won an outright majority.

But Arnaud Mares, Moody's lead analyst for the British sovereign rating said the lack of a one-party majority would "undoubtedly create political uncertainty in the short and perhaps also the medium to longer term."

Meanwhile S&P said it would "review the rating after we have assessed the details of the new government's medium-term fiscal strategy."

"Our focus is on whether the government's fiscal consolidation plan to be unveiled in due course is likely or not, in our view, to put the UK government debt burden on a secure downward trajectory," it added.

The agency said it was forecasting British debt would rise to 77 percent as a proportion of output this year and would approach 100 percent by 2014.

© 2010 AFP

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