S&P vote of confidence in British economy: Credit agency restores UK’s AA rating after Truss mini-budget debacle
Britain’s economy has been handed a vote confidence, providing further evidence that the country is turning a corner.
S&P Global upgraded the UK’s credit outlook to ‘stable’ from ‘negative’, reversing the rating it dished out following September’s mini-Budget.
The ratings agency also reaffirmed its AA rating on UK debt, while predicting economic output to shrink by 0.5 per cent this year, before growing by an average of 1.6 per cent a year between 2024 and 2026.
‘The Government’s decision to abandon most of the unfunded budgetary measures proposed in September 2022 has bolstered the fiscal outlook,’ S&P said.
Recovery: S&P Global upgraded the UK’s credit outlook to ‘stable’ from ‘negative’, reversing the rating it dished out following September’s mini-Budget
Yesterday Prime Minister Rishi Sunak told more than 200 chief executives and investors at the Business Connect summit that his government is ‘unashamedly pro business’, adding that Britain must build on the current momentum.
Last September’s mini-Budget from then Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng sent markets into a frenzy.
The pound plummeted and bond yields rose, prompting S&P to downgrade UK economic outlook to ‘negative’.
Policies, which included slashing the top rate of tax to 40 per cent from 45 per cent and cutting the basic rate of income tax to 19 per cent from 20 per cent, were swiftly reversed by successor Jeremy Hunt.
The ratings agency also welcomed the Prime Minister’s February agreement with the EU, which should expedite the time taken for goods to arrive in Northern Ireland from Britain.