Dagong slashes UK credit rating over new debt fear

THE UK’s credit rating was downgraded yesterday, by Chinese rating agency Dagong.

China’s first domestic credit rating group cut the UK’s rating by one level to A+, from AA-, and placed it on a negative outlook.

The agency cited a reduction in the UK’s capability to repay debts coinciding with extremely disappointing deficit figures.

The British economy will expand by just 1.3 per cent this year and 1.5 per cent next year, Dagong expects.

Conversely, the outlook for China’s economy was also cut yesterday, in a statement from Goldman Sachs. China’s double-digit growth will slow this year to 9.4 per cent, the bank now predicts, and drop to 9.2 per cent in 2012.