Moody's says UK's credit rating is safe for now

THE UK&rsquo;s triple-A sovereign debt ratings is safe for now but the Treasury will need to &ldquo;severely adjust&rdquo; fiscal policies in the wake of the global financial crisis, Moody&rsquo;s Investors Service said yesterday.<br /><br />&ldquo;Moody&rsquo;s believes that the UK continues to warrant the &lsquo;resilient&rsquo; characterisation. However, to retain its &lsquo;resilient&rsquo; status, it will need to severely adjust its fiscal policies, even in the unlikely event of a vigorous rebound in their economies,&rdquo; it said.<br /><br />The rating agency said its central scenario was for Britain to retain its Aaa status, an unchanged view. Moody&rsquo;s reaffirmed Britain&rsquo;s Aaa rating in April and said at the time that the outlook for the rating was stable.<br /><br />&ldquo;We assume that the adjustment to the UK&rsquo;s public finances that is likely to take place in the context of the forthcoming elections &ndash; probably through cuts in spending &ndash; will keep the debt trajectory within Aaa boundaries,&rdquo; the report said.