S&P puts U.K. AA credit rating on negative outlook due to worries over fiscal plan

0
23

S&P Global Ratings on Friday moved its outlook on the U.K.’s AA sovereign credit rating to “negative” from “stable,” citing concerns about the country’s fiscal outlook. The British pound GBPUSD, +0.40% tumbled and yields on British government bonds, or gilts, soared after Treasury chief Kwasi Kwarteng on Sept. 23 unveiled a mini-budget plan that included 45 billion pounds in unfunded tax cuts. The Bank of England this week stepped in to buy gilts in an effort to stabilize the bond market. S&P, in a statement, said it now expects the U.K. government deficit to widen by an average 2.6% of gross domestic product annually through 2025, while net general government debt will continue on an upward trajectory, “in contrast to our previous expectation of it declining as a percentage of GDP from 2023.” The ratings firm said the U.K. “continues to face balance-of-payment risks stemming from its persistently large current account deficit, which we forecast will widen to 6% of GDP this year, in part driven by higher costs of energy imports.”

This article was originally published by Marketwatch.com. Read the original article here.

Previous articleIntel files for an IPO for its Mobileye Global self-driving-car unit
Next article: Marjorie Taylor Greene and MacKenzie Scott are both getting divorced. Their cases have two critical differences — and one key similarity.

LEAVE A REPLY

Please enter your comment!
Please enter your name here