The UK economy has gained a vote of confidence, providing further evidence that the country is taking a turn for the worse.
S&P Global upgraded the UK’s credit outlook from ‘negative’ to ‘stable’ from ‘stable’, reversing the rating it had received after the September mini-Budget.
The rating agency also reaffirmed its AA rating for UK debt, while forecasting economic output to contract by 0.5% this year, before growing at an average annual rate of 1.6% between 2024 and 2026.
“The government’s decision to abandon most of the unfunded fiscal measures proposed in September 2022 has strengthened the fiscal outlook,” S&P said.
Yesterday Prime Minister Rishi Sunak told more than 200 CEOs and investors at the Business Connect summit that his government is “unashamedly pro-business”, adding that Britain needs to build on the current momentum.
Last September’s mini budget of then Prime Minister Liz Truss and her chancellor Kwasi Kwarteng caused a stir in the markets.
The pound plummeted and bond yields rose, prompting S&P to downgrade the UK economic outlook to “negative”.
Policies including cutting the top tax rate from 45 percent to 40 percent and cutting the base income tax rate to 19 percent from 20 percent were quickly reversed by successor Jeremy Hunt.
The rating agency also welcomed the February deal with the EU signed by the prime minister in February, allowing goods to arrive in Northern Ireland more quickly from Britain.
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