Fiscal package: Fitch lowers the rating of Great Britain, including the Bank of England | news

As announced by the agency, it has lowered the outlook for both the country’s rating and the central bank’s rating to negative from stable.

Fitch attributed the worsening of the UK’s outlook to the “large unfunded fiscal package announced as part of the new government’s growth plan”. This could lead to a “significant increase” in the budget deficit in the medium term. Fitch sees the deficit at 7.8 percent of gross domestic product this year and 8.8 percent next year if there are no compensatory measures.

“The change in fiscal stance will push the public debt ratio to 109 percent of GDP by 2024 from an estimated 101 percent in 2022, reflecting both the higher primary deficit and weaker growth prospects,” Fitch said. The agency also pointed to higher government bond yields in recent months. Fitch sees inflation at 8.9 percent this year, and it should gradually fall to 4 percent by 2024.

The Bank of England’s credit rating is directly aligned with that of the UK.

Fitch rates both the UK and the BoE at AA-.

S&P also recently placed the outlook for Britain at negative due to rising fiscal risks.

By Stephen Nacrosis

LONDON (Dow Jones)

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Regina Anderson

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