AMID all the recent political flak over the granny tax, pasty-gate, dinners for donors and the latest controversy, the charity tax, George Osborne received some upbeat news last night when one of the main rating agencies confirmed Britain's triple A rating.

In its latest assessment, Standard & Poor's said the UK Government had the ability to "respond rapidly" to economic challenges as it upheld both the gold-plated rating and the UK's "stable" outlook. The move comes after rival agencies Fitch and Moody's put Britain on a negative outlook.

However, as with most financial opinions, it was qualified. S&P said the Chancellor's tough spending cuts would "drag" on the economy, while household spending would be dampened by sluggish wage growth, a fragile labour and housing market and high private sector debt.

Yet, it added if the Coalition's fiscal policy were to loosen, then the UK could lose its coveted rating.

Last night, Mr Osborne used S&P's view to justify his austerity programme, saying: "This is a reminder that Britain is weathering the international debt storms because of the policies we have adopted and stuck to in tough times."

Affirming the rating, the agency said the UK had a "wealthy and diversified economy, fiscal and monetary policy flexibility, and adaptable product and labour markets".

S&P said it expected average gross domestic product growth of about 1.6% between 2012 and 2015 and that it would return to pre-financial crisis output levels by 2014 in real terms.

"The Budget showed we are ready to go on making the difficult decisions that are keeping our country safe," declared the Chancellor. "Once again, we are reminded that those who want to spend and borrow even more would lead our country into an economic catastrophe," he added.