Britain's coveted triple AAA credit rating under 'threat' after ratings agency puts country on 'negative watch'
Britain's coveted triple AAA credit rating has come under much pressure after an influential credit ratings agency put it on negative watch, according to a report.
Standard and Poor's (S and P) said there was a one in three chance it could lower Britain's rating within the next two years, if economic conditions weaken in the UK.
It said it expected government debt as a percentage of gross domestic product (GDP) to continue to rise in 2015, before declining again, with future employment or growth shocks putting further pressure on Government finances, the Daily Mail reports.
"In our opinion, many of the factors that have restrained growth in recent years will likely continue to do so in the near term," the agency said.
According to the paper, S and P was the last of the three major credit rating agencies to maintain a stable outlook for Britain, and the move comes just over a week after Chancellor George Osborne said he would no longer be able to cut Britain's net debt by 2015.
A downgrade by one of the big three credit ratings agencies would drive up the UK's borrowing costs, potentially jeopardising the Government's deficit reduction plans, the paper said.
"The outlook revision reflects our view that we could lower the ratings on the UK within the next two years if fiscal performance weakens beyond our current expectations," S and P said in a statement.
"We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation," it added.