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UK’s credit rating at risk after George Osborne’s debt failure
Britain could lose its AAA credit rating after George Osborne admitted he will miss his target to reduce Britain’s debts and have to borrow an extra £100 billion.
After the Office for Budget Responsibility issued a stark assessment of the public finances, Fitch, an international ratings agency, said it will review Britain’s status next year and suggested a downgrade is now more likely, the Telegraph reports.
The OBR cut its predictions for UK economic growth again and said that even after a five-year Parliament of spending cuts and tax rises, the Government will still be borrowing one in every ten pounds it spends.
The Government’s debt – the total stock of its borrowing – will not fall as a share of the economy until 2016/17, the OBR said.
Osborne had promised to reduce the debt as a proportion of GDP by 2015/16, but admitted to MPs that he target will be missed by a year.
“Missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the rating,” Fitch said.
