- POSTED: 20 Dec 2013 17:00
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Standard and Poor's on Friday confirmed its top "AAA" credit rating for Britain, noting the government's commitment to reducing its budget deficit.
LONDON: Standard and Poor's on Friday confirmed its top "AAA" credit rating for Britain, noting the government's commitment to reducing its budget deficit.
It comes as S&P downgraded the European Union's long-term credit rating one notch, from "AAA" to "AA+", citing weaker credit worthiness among the bloc. Britain is part of the EU but not the single currency eurozone bloc.
"Standard & Poor's Ratings Services affirmed its unsolicited "AAA/A-1+" long- and short-term sovereign credit ratings on the United Kingdom," it said in a statement.
"Our ratings on the UK are supported by our view of the government's commitment to consolidating the budgetary deficit toward balance by 2018, and policymakers' ability and willingness to respond rapidly to economic challenges," it added.
The ratings agency said it expects average annual British GDP growth of more than 2.0 per cent during 2013-2016.
"During 2013, the UK's economic recovery has been supported almost exclusively by private consumption, alongside residential investment, as net lending to individuals has gradually recuperated from very low 2009-2012 averages," S&P said.
The ratings agency though added that its outlook on the long-term rating of Britain remains negative.
"The negative outlook reflects our view of at least a one-in-three possibility that we could downgrade the UK in the next year if our growth projections fail to materialise. Lower-than-expected (British) growth could derail recent indications of an improvement in fiscal performance and reignite challenges to financial stability," it warned.
Downgrades by ratings agencies can cause a country to pay higher interest for its debt.