LONDON (Reuters) - Britain’s credibility has been damaged by new government forecasts that show Chancellor George Osborne will not meet a key debt reduction goal, sovereign ratings agency Fitch said on Wednesday.
Fitch has a negative outlook on Britain’s triple-A debt rating and said that it would review this again after Osborne’s 2013 budget statement early next year.
Osborne said on Wednesday that he would need an extra year to put Britain’s public debt on a downward path as the growth outlook had darkened markedly over the year.
“The government has chosen not to chase the supplementary target by deploying additional consolidation measures over the next two years. In our view, missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the rating,” Fitch said.
Reporting by David Milliken and Olesya Dmitracova