Moody’s says UK’s credit rating is safe for now
THE UK’s triple-A sovereign debt ratings is safe for now but the Treasury will need to “severely adjust” fiscal policies in the wake of the global financial crisis, Moody’s Investors Service said yesterday.
“Moody’s believes that the UK continues to warrant the ‘resilient’ characterisation. However, to retain its ‘resilient’ status, it will need to severely adjust its fiscal policies, even in the unlikely event of a vigorous rebound in their economies,” it said.
The rating agency said its central scenario was for Britain to retain its Aaa status, an unchanged view. Moody’s reaffirmed Britain’s Aaa rating in April and said at the time that the outlook for the rating was stable.
“We assume that the adjustment to the UK’s public finances that is likely to take place in the context of the forthcoming elections – probably through cuts in spending – will keep the debt trajectory within Aaa boundaries,” the report said.