LONDON (Reuters) - Britain’s ability to absorb further economic shocks while keeping its top triple-A credit rating is “largely exhausted” unless the government takes further deficit-cutting steps, Fitch credit rating agency said on Tuesday.
“As with some other major ‘AAA’-rated sovereigns, unless off-setting measures were adopted, the capacity of UK public finances to absorb adverse economic and financial shocks that would result in yet higher public debt while retaining its ‘AAA’ status has largely been exhausted,” it said in a statement.
British finance minister George Osborne’s fiscal watchdog earlier cut the country’s growth forecasts and raised borrowing predictions.
Fitch said that the lower growth forecasts boosted the credibility of the government’s deficit-cutting efforts, and that Britain still seemed strongly committed to reducing government borrowing.
Reporting by Peter Griffiths and David Milliken