|  Updated: 

Pound unwavering after Fitch downgrades credit outlook

By:

Add as a preferred source on Google
Recent research from the Resolution Foundation found that the rise in long-term sickness over the past few years is the longest sustained rise since the 1990s.
Recent research from the Resolution Foundation found that the rise in long-term sickness over the past few years is the longest sustained rise since the 1990s.

Pound sterling is up marginally against the US dollar at around $1.136 on Thursday morning after a lowered credit outlook from Fitch.

The ratings agency lowered its outlook for government debt to negative from stable, arguing the government’s latest growth could lead to a significant increase in fiscal deficits over the medium term.”

Sterling plunged to a record low against the US dollar last week.

The move comes just days after a similar one from rival Standard & Poor’s, after the government’s mini budget at the end of last month.

Fitch retained its AA- credit rating for the country.

“Although the government reversed the elimination of the 45p top rate tax … the government’s weakened political capital could further undermine the credibility of and support for the government’s fiscal strategy,” Fitch said.

The government said it would bactrack on the policy following vocal opposition from former cabinet ministers Michael Gove and Grant Shapps.

Earlier this week, Chancellor Kwasi Kwarteng told critics, it is , “clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.”