The UK’s premium credit rating may be slashed because of the government's soaring debt, a leading ratings agency has warned.
Experts at Standard and Poor’s (S&P), one of the world’s two main ratings organisation, said that its credit rating for Britain’s government debt remained at "triple A" status, but revised its outlook on the UK from "stable" to "negative".
It said it would resort to a downgrade of Britain’s credit rating if it "concluded that the next government's fiscal consolidation plans are unlikely to put the UK debt burden on a secure downward trajectory over the medium term".
Economists said they believed any cut to Britain's credit rating would be the first for nearly 30 years.
The warning came as official figures showed public borrowing soared to £8.5 billion in April - a record for any April, and more than four times the £1.8 billion borrowed a year ago.
The surge in public borrowing comes as the recession undercuts government tax revenues and rising unemployment forces up benefit payments .
Last month Chancellor Alistair Darling predicted that borrowing would reach an all-time high of £175 billion for the 2009/10 financial year, equivalent to 68 per cent of the UK's economic output in and 12.4 per cent of national income.
UK Credit Rating Warning As Public Debt Hits Reaches GBP8.5bn
Thu, 21 May 2009
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