Britain had its AAA credit rating affirmed by Standard & Poor's yesterday, but the ratings agency retained its negative outlook over continued deficit concerns.
Despite Chancellor Alistair Darling's pledge to cut the deficit by upwards of 50% by 2014, S&P says the Government has not been specific enough on the reduction. "In the absence of a strong fiscal consolidation plan, the UK's net general government debt burden may approach a level incompatible with a AAA rating," S&P says. "We expect to review the long-term rating and outlook again once medium-term fiscal policy becomes clearer following the 2010 parliamentary elections." UK Government bonds rallied yesterday, with the 10-year gilt yield falling 5 basis points to 3.98%.
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes