New blow to UK credit rating as agency warns of likely downgrade

THE UK’s credit rating suffered a fresh blow last night after a major agency placed it on watch for a downgrade only days after the Budget.

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The latest blow for the Chancellor George Osborne came as Fitch warned the country faced a negative outlook over dire predictions for growth and borrowing.

Another of the big ratings agencies, Moody’s, became the first to strip Britain of its gold-plated AAA assessment last month.

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Fitch has placed the UK on “rating watch negative”, indicating there is a “heightened probability of a downgrade in the near term”.

It expects to complete a full review of the sovereign credit rating by the end of April.

The agency said the move “reflects the latest economic 
and fiscal forecasts published by the Office for Budget Responsibility (OBR) that indicate that 
UK government debt will peak 
later and at a higher level 
than previously expected by Fitch”.

“The persistently weak performance of UK growth, in part due to European growth, has increased uncertainty around the UK’s potential output and longer-term trend rate of growth with significant implications for public finances,” the agency said.

Shadow Treasury minister Chris Leslie said: “This is yet another blow to a downgraded 
Chancellor who made keeping the confidence of the credit rating agencies the number one test of his economic policy.

“George Osborne’s plan 
has catastrophically failed on growth, living standards and the deficit. But instead of a change 
of direction and action to kickstart the flatlining economy all we 
got this week was more of the same failing policies.

“That’s why this more of 
the same Budget will be remembered as a wasted chance to change course before it was too late.”