Fitch Ratings has warned it could downgrade the United Kingdom’s AAA rating in the next couple of years if the government fails to contain the expansion of its public debt.
The credit ratings agency revised the outlook on the UK’s rating to negative from stable, warning that the Government has “very limited fiscal space to absorb further adverse economic shocks”. In a major blow for George Osborne ahead of next week’s Budget, Fitch said the “risks and uncertainty” surrounding the Coalition’s debt reduction plans were “material”. The Treasury said the decision is a warning to those calling for deficit-funded giveways in next week’s Budget. Only last month, Moody’s also put Britain’s top-notch rating on a negative outlook, implying a one-in-three chance of a downgrade.
“A week from the Budget this is a reminder of why it is essential Britain sticks to its plans to deal with its debts,” a Treasury spokesman said.