UK to keep triple A credit rating

Wednesday, 9 September 2009 10:30 AM

By Liz Stephens

Ratings agency Moody's will announce today that the UK's credit rating is unlikely to be downgraded, despite the levels of debt.

Moody's says it has no plans to downgrade any country with a triple A rating in the "near future"

This is good news for the government as, if the UK had lost its credit rating, borrowing costs could have spiralled and deepened the financial crisis.

However, in a report on Wednesday, Moody's singled out the UK and the US as two countries that "have lost altitude" lately and warned that further deterioration - although extremely unlikely - could conceivably lead to a loss of the triple A rating in the future.

Moody's downgraded Ireland's triple A status in July.

The FTSE 100 rose yesterday to levels not seen since the collapse of Lehman Brothers a year ago and the National Institute for Economic and Social Research (NIESR) declared that, in its opinion, the UK is now out of the recession.

However, prime minister Gordon Brown has made clear he intends to continue to press other European countries to continue to spend to ensure the global economy fully recovers at the G20 summit in Pittsburgh.

And last week, chancellor Alistair Darling said: "My view is that the biggest single risk to recovery is that people think the job is done.

Shadow chancellor George Osborne heavily criticised the government's policy and sided with France and Germany that the UK should bring an end to stimulus packages.

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