Second ratings agency could downgrade UK

UK Political Correspondent

Saturday 23 March 2013

A second credit ratings agency has raised the prospect it will downgrade the UK economy – furthering fears of a "triple-dip" recession.

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Kate Devlin UK Political Correspondent

The move, by Fitch, will be seen as a slap in the face for the Chancellor George Osborne just days after he unveiled his latest Budget.

In a statement, Fitch warned the move was triggered in part by the UK's slashed growth forecast, announced by Mr Osborne this week.

The Treasury last night moved to insist the economy was on the "right track", but Labour accused the Tory-LibDem Coalition of a "catastrophic failure" to promote growth.Last month, ratings agency Moodys moved to strip the UK of its coveted AAA credit status.Ministers are still nervously awaiting figures that could show the UK has entered recession for the third time in five years.Mr Osborne said in his Budget statement that independent forecasts for the UK's growth this year had been halved to just 0.6%.At the same time, the independent Office for Budget Responsibility warned the UK's debt was due to rise, to 85% of GDP, and would only begin to fall in 2017-18.Fitch put the UK on "negative watch" and warned of a "heightened probability of a downgrade". It is expected to announce its decision within weeks. Such a downgrade would leave Standard & Poor's as the only major agency with a top rating on the country.A Treasury spokesman said: "It's taking longer than anyone hoped, but we're on the right track." Chris Leslie, Labour's Shadow Treasury Minister, 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."

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Second ratings agency could downgrade UK

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