March 22, 2012 / 1:55 AM / 7 years ago

No impact on UK's AAA rating from budget proposals - Fitch

A plaque is pictured at the entrance of the Fitch offices in downtown Milan January 24, 2012. REUTERS/Alessandro Garofalo

NEW YORK (Reuters) - Fitch Ratings on Wednesday said Britain’s latest budget proposals show commitment to its existing deficit reduction strategy and do not impact its AAA credit rating.

“As expected, the announcement did not contain unfunded tax and spending measures while the updated economic and fiscal forecasts are marginally better than forecast in the Autumn Statement,” Fitch said.

“However, the scale of the fiscal challenge remains large relative to its ‘AAA’ peers and the Chancellor (George Osborne) confirmed that austerity will have to extend beyond the term of the current parliament if the government’s fiscal targets are to be met,” the statement added.

Osborne announced plans to cut the top rate of income tax while imposing new levies on the wealthy as part of his annual budget statement on Wednesday.

Britain holds the top level credit rating from Fitch, Standard & Poor’s and Moody’s Investors Service. Fitch and Moody’s have negative outlooks on Britain’s credit rating while S&P has the country at stable.

Reporting By Daniel Bases and Rodrigo Campos; Editing by Dan Grebler

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