UK triple-A credit rating maintained

CREDIT ratings agency Moody’s has maintained Britain’s triple-A status, citing the coalition government’s commitment to fiscal discipline and the flexibility of the UK economy.

In a major coup for the coalition government, Moody’s said its deficit-cutting plans, the long maturity profile of UK government debt and the likelihood that growth will continue even in the face of “austere fiscal consolidation” all supported a triple-A rating.

Kenneth Orchard, Moody’s lead analyst for the UK said while the global financial crisis caused “serious long-term damage” to the UK’s balance sheet, the economy would maintain a moderate pace of growth over the medium term.

Private sector deleveraging, the uncertain state of the financial sector and slower growth in the UK’s main trading partners were still concerns, he warned.

But Orchard said the budget would be in surplus by around 2014, and that the restructuring of the country’s banking sector would only incur small additional costs.

The government welcomed the news. “This supports the government’s approach to cutting the deficit,” said a Treasury spokesman.