Failure to cut deficit may see UK’s rating lowered
STERLING fell to a one-month low against the euro and slid against the dollar yesterday morning, after a Moody’s analyst was quoted saying the UK was at risk of losing its top-notch rating.
The UK could lose its AAA rating if growth remained weak and the government failed to meet its fiscal consolidation targets, the analyst said.
The rating agency subsequently said its outlook for Britain was stable, though it might reconsider if targets were missed.
The euro rose to 89.76p, while the pound touched a low of $1.635, although sterling pared losses against the dollar in later trading, and gained against the euro.
Both the European Central Bank (ECB) and Bank of England announce their latest interest rates decisions today. The ECB is expected to indicate a near-term rate hike.