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Fitch maintains stable outlook for Britain's AA+ credit rating

English.news.cn   2014-06-13 19:08:50

LONDON, June 13 (Xinhua) -- Fitch on Friday maintained Britain's long-term foreign and local currency issuer default ratings at AA+ with a stable outlook, and raised its expectation on Britain's GDP growth to 3 percent this year.

Fitch downgraded Britain's sovereign credit rating from triple-A to AA+ last April.

The London-based credit ratings agency said since their last review in December, favorable macroeconomic trends, including GDP growth, falling unemployment, and inflation close to the 2-percent target, have continued in Britain's economy.

Fitch judges the growth to be "partly cyclical, reflecting the gradual closing of the previous large output gap."

It raises the growth forecasts for 2014 and 2015 to 3 percent and 2.5 percent respectively, higher than its previous estimation of 2.3 percent that given six months ago. The medium-term growth potential is in the range of 2 to 2.25 percent.

Britain's ratings are "underpinned by its high-income, diversified and flexible economy as well as a high degree of political and social stability," said Fitch.

Fitch expects that British gross general government debt, using the European Treaty definition, to peak at 92 to 93 percent of GDP in fiscal year 2015-16 and to start declining in 2017.

"Strong civil and policy institutions and a high degree of transparency enhance the predictability of the business and economic policy environment, which compares favorably with peers in the AA' category," the agency said in a statement.

Fitch also noted that in the event of a "yes" in the Scottish referendum, there would be a transition period, and the transition would be managed carefully, avoiding financial dislocations.

If not, the downside pressure on the ratings would be greater, warned Fitch.

Editor: Fu Peng
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