Fitch lowers UK credit rating to 'negative' in light of Mini Budget

Maintains ‘AA-’ investment grade rating from agency

Valeria Martinez
clock • 1 min read

Ratings agency Fitch has lowered the UK’s government debt rating from 'stable' to 'negative' in wake of the Mini Budget, but maintained the UK's 'AA-' investment grade.

The agency cited the "large and unfunded" fiscal package announced as part of the new government's growth plan as a main driver for its decision, which it said could lead to a significant increase in fiscal deficits over the medium term. According to Fitch, the lack of independent budget forecasts, as well as an apparent clash with the Bank of England's efforts to fight inflation had "negatively impacted financial markets' confidence and the credibility of the policy framework, a key long-standing rating strength". On Monday (3 October), the chancellor Kwasi Kwarteng reversed the gove...

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

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Bank of England holds interest rates at 5% after inflation stalls

Bank of England holds interest rates at 5% after inflation stalls

Up to two cuts expected before year-end

Cristian Angeloni
clock 19 September 2024 • 2 min read
UK inflation holds firm at 2.2% as Bank of England decision beckons

UK inflation holds firm at 2.2% as Bank of England decision beckons

BoE weighs options ahead of the next MPC next Thursday

Linus Uhlig
clock 18 September 2024 • 2 min read
Chancellor warned current fiscal path could see 'deterioration' of public finances

Chancellor warned current fiscal path could see 'deterioration' of public finances

OECD urges Rachel Reeves to shorten fiscal time horizons

Eve Maddock-Jones
clock 16 September 2024 • 2 min read