lifts outlook on UK's top credit rating, but warns on EU
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[June 14, 2014]
LONDON (Reuters) - Ratings
agency Standard & Poor's upgraded its outlook on
Britain's top-notch triple-A credit rating to stable
from negative on Friday, but said this would be
threatened if Britain decided to leave the European
In news that will hearten finance minister George Osborne, S&P said
Britain was making good progress in getting its public finances in
Osborne's Conservative-led government promised to protect Britain's
credit rating when it took power in 2010, but subsequent economic
stagnation and rising debt caused Moody's and Fitch to strip Britain
of their triple-A ratings last year.
"We anticipate that the UK's economic recovery will continue to
broaden, benefiting the public finances," S&P said in a statement.
But S&P warned of consequences if Britain decided to leave the
European Union. The Conservatives have pledged to hold a referendum
on Britain's membership of the EU in 2017 if they win next year's
"We believe that if the UK were to leave the EU, this would weaken
the UK's economic prospects, and be a negative factor for the
rating," said S&P, citing likely damage to trade.
S&P also played down concerns about the strength of Britain's
housing market upturn, and said it expected future house price rises
to be "more contained" with the introduction of macroprudential
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Osborne said on Thursday that he would grant the Bank of England new
powers to impose maximum loan-to-value and loan-to-income ratios on
mortgage lending - a step that BoE Governor Mark Carney welcomed.
S&P, the only major ratings agency to retain a triple-A rating on
British sovereign debt, said its outlook upgrade meant there was now
a less than one-in-three probability that Britain will lose its top
credit rating within the next two years.
Fitch Ratings earlier on Friday affirmed its "AA+" grade for
Britain, one notch below its top rating.
(Reporting by Andy Bruce and David Milliken; Editing by Kevin
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