S&P Cuts U.K. Outlook to Negative on Risks From Weak Economy |
| Bloomberg - Dec 13, 2012 |
Standard & Poor’s lowered its outlook on Britain’s top credit rating to negative, citing weak economic growth and a worsening debt profile.
The outlook on the AAA grade, revised from stable, means there is a one-in-three chance that S&P could cut the rating in the next two years, it said in a statement in London today. This could happen if the U.K.’s economic and fiscal performance “weaken beyond our current expectations,” it said.
“We expect economic growth to accelerate slowly, but the risks to our growth assumptions are weighted to the downside however, with associated risks to government finances,” the ratings company said.
The revision increases political pressure on Chancellor of the Exchequer George Osborne, who has promised investors he would stick to plans for the biggest fiscal squeeze since World War II even as the economic recovery struggles to gain traction. Still, investors often ignore such actions, evidenced by the drop in French 10-year bond yields following a downgrade last month and a rally in Treasuries after the U.S. lost its top rating at S&P in 2011.
Read Full Article from Bloomberg
- Posted: 2012-12-13 16:58:06
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