Fitch warns UK over debt

Steve Dinneen
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CREDIT ratings agency Fitch yesterday warned that the government’s budget deficit reduction plan is too slow.

The agency says the Treasury needs to be more aggressive in reducing the spiralling budget deficit, which stands at £178bn. Alistair Darling announced plans to halve the deficit within four years at the Pre-Budget Report last year. Total UK debt is expected to rise to £1.4 trillion in that time.

Fitch is often the first of the big credit rating agencies to downgrade the debt of sovereign nations. Rival ratings agency Standard & Poor has already placed the UK’s triple A credit rating on “negative watch”.

Lord Mandelson, the business secretary, also underlined the high stakes involved in the pre-election Budget. He warned that both Britain and Europe faced a phase of “rapid relative economic decline” if governments failed to cut spending.